Interchange Questions

What this category covers

This category covers how interchange is set, why a transaction downgrades, and which downgrade causes sit on your side of the line. The answers are written to give you the structure of the decision - what has to be true, who decides it, and what to get in writing - rather than a single number that stops being accurate the moment your volume or card mix changes.

Where an answer depends on your own account, it says so and points at the statement line that would tell you. A page cannot know your effective rate, and any page that claims to is guessing.

Why it matters operationally

Interchange is most of what you pay and none of it is your processor's margin, which is why knowing the split matters.

The cost of getting this wrong is rarely dramatic. It is a few basis points on every transaction, every month, which is exactly why it goes unexamined for years.

Where operators go wrong

• Reading the headline discount rate and believing it describes what you pay.
• Batching late and downgrading otherwise-perfect data.

1 question in this category

• Why do credit card transactions downgrade?

  A transaction downgrades when it fails to meet the requirements of the interchange category it would otherwise qualify for and settles at a more expensive one instead. Common causes are missing line-item or Level 2 data, freight billed on a separate invoice, settlement outside the required window, a missing purchase order reference, and sales tax left blank rather than flagged exempt. A downgrade produces no error and no alert: the payment succeeds normally and simply costs more.

  Updated September 30, 2026

This category is still being built out. We keep it linked from the questions hub, but hold it back from search listings until it carries at least 3 published answers — a page with nothing to list is not worth anybody's click.

What to read next

The downgrade reason reference lists each cause and whether you or your processor owns the fix.