Comments on: The interchange win A slice of lime in the soda Sun, 26 Oct 2014 19:05:02 +0000 hourly 1 By: seanharper Mon, 28 Jun 2010 16:49:42 +0000 Jenn – I agree, I am skeptical that businesses will pass the savings on. I expect that businesses will actually have a really hard time monitoring and managing their card mix.

The friction of looking at a customers card, determining what kind of card it is, informing the customer of a surcharge, asking the customer to use a different card, charging the surcharge, etc is pretty steep and I doubt many retailers will bother.

Even if that interaction is smoothed out with very good implementation within POS software, influencing the card mix will be hard for the retailers to solve.

Most small and mid-market businesses don’t actually know their card mix. One reason is that many of the common billing formats that the credit card processors use (such as tiered billing and ERR) obscure the actual card mixes in order to allow the processor to hide the magnitude of the markup they are making above interchange.

For other people who are geeks about credit cards and interchange, a colleague of mine and I put up a little mashup at We used a few data sources, including a BIN number database (the BIN number is the first 6 numbers of your credit card) and the interchange guidelines published on visa and mastercard’s websites. It’s a fun way for consumers to get a sense for how much their personal credit card costs the business when they shop.

The difference between using a debit card and credit card can already be pretty big. Ironically, most consumers tend to use debit cards for smaller purchases and debit cards also tend to be more expensive for smaller purchases (since they have a greater per-transaction component).

By: jennkepka Tue, 22 Jun 2010 18:58:53 +0000 I like the idea of this, but I have none of the faith that you do in the idea that businesses will pass the “savings” of using cash or debit on to customers. Right now, many places break the credit card-merchant agreement in order to charge people extra fees for using credit cards; if interchange fees on debit cards drop, I wonder if they won’t just increase the charge on credit transactions, meaning they’ll be making more from regular purchases while the benefits remain the same for customers.

In fact, the only place I expect to see this make a huge pocket-book difference right away is at gas stations, where “cash only” has been a discount offered for years. Hooray?