Interchange Optimization

Downgrades and Interchange Optimization

In order for you to get the best interchange rate, the transaction detail (string of data) has to conform to certain rules (qualification criteria for the lowest possible rate to avoid downgrades that result in higher transaction fees) established by the credit card brands.  For example, following are two possible interchange rates for a single transaction; one that qualifies at the lowest rate and the other downgrades:

VISA: CPS/Card-Not-Present Qualified Rate: 1.80% + $0.10
VISA: EIRF (Electronic Interchange Reimbursement Fee) Downgrade Rate: 2.30% + $0.10

Note:   The reimbursement aspect of EIRF refers to the card issuing bank’s higher fee when the qualification criteria are not met. The issuing banks receive a 50-basis point (1/2%) rate increase with the downgrade.

To qualify for the best interchange rate, in this category, the following criteria must be met

  • Address Verification System (AVS) request
  • Shipping product within 7-days of the authorization
  • The original AUTH ID from your authorization must be included with the settlement transaction provided
  • The order number or invoice number in the settlement transaction must be provided
  • The transaction settlement must be no longer than 7-days after the authorization date
  • The transaction settlement must be no longer than 3-days after the completion of the sale

In analyzing merchant statements, we have found that most are laced with EIRF downgrades that cause unnecessary expenses and cost you money!  Our mission is to help you eliminate these costly processing mistakes through simple solutions and best business practices!

This is just one category of the many possible downgrades that can cause merchants unnecessary expense and can easily be corrected.