Interchange Pass Through (Interchange Plus)
Most small businesses rely on a traditional three tier merchant account which is comprised of a variety of fee schedules. Each of these nuanced charges are classified into qualified, mid-qualified, or non-qualified rate bins that represent the fees the merchant pays (visit our Merchant Academy series for more about rate structures). But larger businesses don’t do this. They simply pay a low flat rate called “Interchange Pass Through” also known as “Interchange Plus” which is the best value available.
These lower rates are justified because of the tremendous volume the business does with the bank. This is not unlike how big business can justify aggressive pricing regarding insurance options available to employees. When the risk is shared over a large pool, a lower cost can be negotiated. In this case, Interchange Pass Through customers pay a flat rate above the published processing cost.
But you don’t have to be a “Mega Company” to take advantage of this heavily discounted rate schedule. Interchange Pass Through can also be made available to smaller companies. Sometimes processors will apply a bit higher flat fee over the base processing costs. Other times it’s possible for small businesses to “pool” together to create an alliance. This large alliance of merchants can now negotiate as if they were a larger business entity. What you need is a merchant processor that understands the process and can be your advocate so you can secure the best rates possible.
Does your business qualify for Interchange Pass Through?
If it doesn’t now, it may soon. The best thing to do is to give us call and let us know you are interested in Interchange Pass Through. As a general rule, the threshold for qualification begins once your processing history reflects about $5,000 per month for Visa and MasterCard transactions.
Interested in what 1st National can do for your business? Give us a call or complete our “quick quote” request. Between our well rounded inventory, Class A Settlement Banks & Processors, and a full suite of Merchant Accounts and Merchant Services, our talented agents are sure to be of value.