Understanding Interchange

Understand interchange rates work, and how cards qualify for specific rates. Visa and MasterCard have special programs for certain merchant types and Dharma will help you find the best possible rates. Click through to learn more and educate yourself!

MasterCard Charity

MasterCard has a special rate category specifically designed for nonprofits. Not all nonprofits will qualify – but if you’re classified with the MCC of 8398, or as a “Charity or Social Service” organization, then you’ll qualify for far-reduced interchange rates.

MasterCard Emerging Market

Since not all industries accept credit cards, MasterCard tries to incentivize “newer” industries with lower, more advantageous interchange rates. These are called Emerging Market interchange rates. The only qualifying business types are Schools, Government Offices, Insurance-sales, Utilities, and Toll-Roads.

MasterCard Supermarket

To qualify for the below MasterCard supermarket rates, your business must be classified as a grocery/supermarket, with an MCC of 5411. Below are the basic qualifications, plus you’ll see each type of card that’s eligible for supermarket rates, along with the associated potential downgrade:

MasterCard Restaurant

To qualify for the below restaurant rates, merchants must be classified as a restaurant or quick-service merchant (MCC of 5812 or 5814). Quick-serve merchants will only be eligible for debit sales within this rate classification. Read on for the basic qualifications, plus you’ll see each type of card that’s eligible for restaurant rates, along with the associated potential downgrade.

MasterCard Lodging/Hotel/Auto-Rental

Because lodging and auto-rental merchants have unique needs, there’s a special rate category designed for them. These merchants take extended authorizations – meaning the card may be authorized weeks before the sale is finalized. Similarly, final amounts of the sale are often different from the original authorization. For “regular” merchants, this would result in downgraded transactions. But lodging/auto-rental merchants can follow specific rules to access low rates.

MasterCard Merit I (Card-Not-Present)

The “Merit I” category is for key-entry and E-Commerce MasterCard sales that meet include AVS and are settled within 1-2 days. Barring a few exceptions, most merchants are able to receive these interchange rates.

MasterCard Travel & Entertainment (T&E)

Travel & Entertainment merchants typically pay slightly higher rates than other merchant types. This rate category will apply to “premium” cards accepted by T&E merchants.

MasterCard Small Ticket

MasterCard allows for lower debit card rates on low-ticket sales. There are many qualifying merchant types, typically relating to industries that cater to small-ticket transactions. Fast food, taxis, parking lots, video rentals, convenience stores, theaters, newsstands, car washes, copy centers, laundry services, and bus lines are all eligible.

MasterCard Merit III (In-Person)

The “Merit III” or “Merit 3” category encompasses traditional consumer credit cards, as opposed to business/purchasing cards. Barring a few exceptions, most merchants are able to receive this interchange rate, as it represents the best qualification level for in-person sales. Below are the basic qualifications, plus you’ll see each type of card that’s eligible for Merit III rates.

MasterCard Convenience Base

MasterCard has a special “Convenience” rate program designed for a few specific types of merchants. You must be categorized as a quick-service food establishment, movie theater, taxicab/limousine, or convenience store to gain access to these rates. The intention of this program is to give lower rates to merchants who regularly process many small-ticket sales. These interchange rates have no “per-transaction” fees, which often add up quickly for low-average-ticket merchants!