Do Interchange Rates Change?

The answer is yes. The Card Associations typically release updates to their Interchange Fees, Assessments, transaction qualification requirements, and card products twice a year: in April and October. Changes may also be released at other times of the year. Changes outside of the April and October releases usually go into effect in either January or July.

The Card Associations make changes for a variety of reasons, and depending on a merchant's Merchant Category Code (MCC), the changes can result in costs either increasing or decreasing. Some of the reasons that the Card Associations make changes to Interchange Rates and Assessments include:

  • Federal Regulation: The Durbin Amendment to the Dodd-Frank Financial Reform Bill mandated reductions in debit card interchange fees and changes to transaction qualification rules.
  • Moderating Merchant Behaviour: The Card Associations have introduced a variety of new Assessments in recent years to reduce "ghost authorizations" (authorizations that do not settle or fail to settle in a timely manner): Account Verification, Mis-Use of Authorization, Zero Floor Limit, Transaction Integrity Fee, Account Status Inquiry, Processing Integrity, etc.
  • Introducing New Card Products: The increased use and availablity of PrePaid Cards, as well as their exempt status from the Durbin Amendment, has led to recent introductions of a variety of new PrePaid Card Products with their own Interchange Fees distinct from Credit and Debit.
  • Encouraging Emerging Markets to Increase Card Acceptance: New, usually lower, Interchange Rates have been introduced to entice industries and markets to accept payment cards that had not previously: Small Ticket (Fast Food, Vending), Passenger Transport (Taxis, Commuter Trains/Buses), B2B (Business-to-Business Sales), GSA/Large Ticket Purchasing (Government Contracting), and Charitable (501c3).