Glossary of Terms Used in Payment Processing | Shift4: "Discount Rate - This is the fee paid by a Merchant to the Merchant Bank to handle the deposit of credit card funds into their bank. It is usually quoted as a percentage to hundreds (or basis point).
Effective Rate - The calculated bundled rate to the Merchant of a transaction after combining the Discount Rate, assessments and other per item transaction fee.
Interchange - The exchange of transaction data, in this case credit card payments, between the Acquiring Bank and Issuing Bank.
Interchange Fee - This is the fee that the Card Association charges the Merchant to get the funds into his bank (Merchant Bank) and to get the billing information to the Cardholder's Bank (Issuing Bank). Interchange Fees are based on following credit card regulations and capturing appropriate data including card swipe, address, and electronic signature as needed."
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