CPS Retail Base Prepaid
CPS Retail Base Prepaid is the Visa Interchange Rate for a card present prepaid card transaction. Visa introduced it in October 2011.
Interchange fee: 1.15% + $0.15
- Introduced October 2011
- Cardholder and card present, signature obtained, single electronic authorization, merchant name, city, and state included in authorization
- Read and transmit complete magnetic stripe, transaction settled within 1 day of authorization, authorization response data included in settled transaction.
- Clearing amount must equal authorization amount except for the following sic codes: 4121 (Taxicabs and Limosines), 5813 (Bars & Taverns), 7230 (Barber & Beauty Shop), 7298 (Health & Beauty Spas). This is to account for tipping in these business types.
What's the difference between a prepaid card vs a debit card?
Unlike debit cards, prepaid cards are not linked to a bank account. Instead money is "prepaid" onto the card to give it value. Once the money "on the card" has been spent, that's it. The card cannot be used again until more money has been prepaid onto it. Sometimes prepaid cards can only be used for in-person transactions, and will not work for card not present or online purchases. Prepaid cards are typically used by consumers who do not have a bank account. Since prepaid interchange was introduced at the same time as regulated debit interchange, it was seen as an attempt to sidestep the regulations to charge a higher interchange fee. The idea was that your bank would convert your debit card into a prepaid card in order to collect a higher interchange fee. Sneaky banks! But, don't worry, it hasn't really worked out that way, most banks still issue debit cards, and prepaid cards have remained primarily for the "underbanked" segment.