Reference
Payment Certification Levels
A practical guide to EMVCo L1 / L2 / L3 terminal certifications, PCI DSS merchant compliance tiers, and the standards that govern every card-present transaction.
Interchange & Payment Economics
Interchange is the fee paid by the acquirer to the issuer on each card transaction. It is set by the card scheme (Visa, Mastercard) — not by banks or acquirers. The merchant ultimately bears this cost through the Merchant Discount Rate (MDR = interchange + scheme assessment + acquirer margin).
The 4-Party Model
Cardholder
Issuer
receives interchange
scheme fees
Scheme
Visa / MC
scheme fees
Acquirer
pays interchange
Merchant
pays MDR
Flow: Interchange flows from acquirer to issuer. MDR flows from merchant to acquirer. Scheme assessment fees flow from acquirer and issuer to scheme.
Rate Determination Factors
Factor
Impact on Rate
Card Type
Credit vs Debit vs Prepaid. Prepaid is typically highest for merchant; regulated debit often lowest.
Card Product Tier
Standard < Gold < Platinum < Infinite/Signature < World Elite. Higher rewards = higher interchange.
MCC
Grocery, pharmacy, fuel often have capped/reduced rates. Utilities: bill payment rates. B2B/corporate: higher.
Transaction Channel
Card-present (lowest) < Contactless < Card-not-present (highest). Online = CNP.
Authentication
3DS-authenticated CNP qualifies for lower rate than unauthenticated CNP.
Data Quality
Level 1 (basic) < Level 2 (+ tax, PO#) < Level 3 (+ line-item). L2/L3 dramatically reduce B2B rates.
Settlement Timing
Card-present settled within 24h qualifies for best rate; late settlement may trigger downgrade.
Visa Key Interchange Categories
Rates are approximate US market examples. Updated semi-annually by Visa.
Category
Typical Rate
Qualifications
CPS/Retail
~1.51% + $0.10
Card-present, swiped/dipped, full auth
CPS/Supermarkets
~1.22% + $0.05
MCC 5411, card-present
CPS/Rewards 1
~1.65% + $0.10
Rewards card, card-present
Consumer Credit CNP
~1.80% + $0.10
Card-not-present, standard consumer
Consumer Rewards CNP
~2.30% + $0.10
Rewards card, card-not-present
Business Card CNP
~2.50% + $0.10
Commercial card, card-not-present
EIRF (Downgrade)
~2.30% + $0.10
Electronic Interchange Reimbursement Fee — missing data or late settlement
Standard (Worst Downgrade)
~2.70% + $0.10
Missing critical data, very late settlement, or non-qualifying transaction
Mastercard Key Interchange Categories
Approximate US market rates.
Category
Typical Rate
Qualifications
Merit 1 (Retail)
~1.48% + $0.10
Card-present, chip or mag-stripe
Merit 3 (e-commerce qualified)
~1.75% + $0.10
CNP, full 3DS authenticated
Consumer Credit Standard
~1.89% + $0.10
Standard consumer credit card
World/World Elite Card-Present
~1.90% + $0.10
Premium rewards card, card-present
World/World Elite CNP
~2.20% + $0.10
Premium rewards card, card-not-present
Commercial Card
~2.65% + $0.10
Corporate/purchasing card
UCAF Full (3DS Authenticated)
~1.75% + $0.10
Lower than standard CNP when fully authenticated
Downgrade Causes
- Missing required data fields (no tax amount, no PO# for Level 2; no line items for Level 3)
- Late settlement (>24h for card-present; >3 days for CNP)
- Missing or incorrect CVV2 for CNP transactions
- No 3DS for CNP where merchant is enrolled (Visa EIRF conditions)
- Authorization hold timeout — force-posting without re-authorization
- Split-ticket transactions (prohibited by scheme rules)
- Wrong MCC — merchant mis-categorized for industry type
Interchange Optimization
- Use Level 2/3 data for corporate/business card transactions — can reduce rate by 0.5–1.5%
- Implement 3DS for all CNP to qualify for authenticated CNP rate and reduce fraud liability
- Settle card-present transactions within 24 hours of authorization
- Verify MCC is correct for your industry — wrong category can cost significantly
- Use tokenization for recurring billing — reduces decline rates AND may qualify for better CNP rates
Assessment Fees
Assessment fees are paid on top of interchange. They go to the card scheme, not the issuer.
Fee
Rate / Amount
Applies To
Visa ISA (International Service Assessment)
0.228%
Cross-border transactions
Visa NABU
$0.0195
Per authorization
Visa FANF
Tiered
Fixed Acquirer Network Fee — tiered by monthly volume
Mastercard Assessment
0.1375%
Settled transaction volume
Mastercard NABU
Varies
Network Access Brand Usage fee
Mastercard APF
Per auth
Acquirer Program Fee per authorization
Related Tools
Use these tools to work with the cryptographic primitives that underpin terminal and card security.