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Calculating the True Rate for US Merchants.

The problem: US interchange rates and card brand fees are composed of both dollar amounts and percentages.  The true rate is only composed of a percentage.

The solution: We must convert the dollar amounts into percentages.  Once converted we can add up the percentages and come up with the true rate.

The example:

                Visa Debit Retail Swipe CPS      Interchange rate:  $0.15+0.80%   

           Card Brand Fee: $0.0220+0.1367%

            Helcim Cost: 0.18%

            True Rate: 1.346%

                First thing to keep in mind is that all the calculations done in the charts on our website are based on an average transaction size of $75 and an average monthly volume of $7500 in debit and credit card payments.

                Step 1: Convert all Dollar amounts to percentages.

                Basic formula: ($amount / 75.00) *100  

0.15/75.00 *100 = 0.2%

                                0.0220/75*100 = 0.0293%

                Step 2: Add up all the percentages

                Interchange rate: 0.2%+0.8% = 1.0%

                Card brand fee: 0.0293%+0.1367% = 0.166%

                Helcim cost: 0.18%

True rate = 1.0% + 0.166% + 0.18% = 1.346%


The average transaction rate

This figure at the bottom of each of our charts is a weighted average, based on the popularity of each credit card type.