Saturday, January 27, 2007

Anatomy of an Interchange Charge (

Just moments ago, a retail customer at 30 Minute Photos Etc. presented us with their debit card; however, the electronic payment card terminal was unable to process their transaction.

This typically is caused due to a faulty magnetic strip on the card. What does this mean to retailers? The transaction had to be manually keyed into the terminal at the signature card, non-PIN rate. And there are more fees too. Because we were unable to swipe the card, a higher interchange fee was imposed. And then an even higher fee because the card terminal prompted us for the street and zip code cardholder's information. If you do not enter that information, there is an even higher fee. Because the transaction with the customer was delayed, we did not want to further inconvenience the shopper by asking for the street and zip code information as well. Just another day in the interchange fee battle.

[Source: commentary,]