In an attempt to dispel myths regarding Interchange, MasterCard has put together a brochure (PDF) designed to show how priceless Interchange is. They have also created several documents trying to "discount" charges that interchange is too high.
It all makes for some interesting reading. Below I have included links from their website, followed by their press release.
From MasterCard.com
Every business establishes a price for the goods and services it provides, and the electronic payments business is no exception. As one element of the cost of acceptance, interchange is a small fee in relation to the enormous value merchants receive for accepting MasterCard payment cards.
For almost 40 years, MasterCard has established default interchange fees that have proven to be the most efficient way to balance costs in the system and promote a strong, competitive payments industry that benefits cardholders, merchants and financial institutions. Today, some 25,000 financial institutions provide the cards and services that allow hundreds of millions of consumers and 25 million merchants around the world to benefit from the convenience and security of electronic payments.
Learn more about interchange from the information below:
Interchange Backgrounder (227 KB PDF)
Interchange Facts and Myths (110 KB DOC)
Interchange and the Electronic Payments System (Downloadable audio file)
Behind a Transaction (Windows Media File)
Interchange Rates
MasterCard dispels myths, highlights benefits of payment networks
The paper, entitled "Benefits of Open Payment Systems and the Role of Interchange," underscores the enormous benefits delivered by electronic payments, which have become so ingrained in everyday life they are often taken for granted or misunderstood. Few people ever stop to consider the complex and sophisticated system that allows transactions to occur within seconds, almost anywhere in the world.
"Perhaps the easiest way to grasp the value of electronic payments is to envision a world without them. Clearly, if electronic payments came to a sudden halt, many facets of commerce - travel, trade and the Internet just to name a few - would face dire consequences," MasterCard President and CEO Robert W. Selander says in the introduction.
The paper also discusses the role of interchange - a relatively small fee paid for the benefits merchants get from card acceptance. Interchange is critical to ensuring the system provides maximum benefits to all participants, including consumers and merchants in a fiercely competitive marketplace.
MasterCard has created this brochure as a resource for all those interested in the payments industry. To access the paper, please visit, http://www.mastercard.com/us/company/en/ourcompany/interchange.html .
About MasterCard Worldwide
MasterCard Worldwide advances global commerce by providing a critical economic link among financial institutions, businesses, cardholders and merchants worldwide. As a franchisor, processor and advisor, MasterCard develops and markets payment solutions, processes over 18 billion transactions each year, and provides industry-leading analysis and consulting services to financial institution customers and merchants. Through its family of brands, including MasterCard®, Maestro® and Cirrus®, MasterCard serves consumers and businesses in more than 210 countries and territories. For more information go to www.mastercard.com .
Source: Company press release
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