An interchange fee is the fee charged by banks to the merchant who processes a credit card or debit card payment. The purpose of the fee is to cover the costs associated with accepting, processing and authorizing card transactions. These fees average between 20 cents and 65 cents, depending on the type of card used and whether the transaction is covered by the interchange fee standard.
In this project, I’ll explain what interchange fees are, where they come from, and the factors that go into deciding what fees you’ll pay for a given transaction.
It is important to understand what the level of Interchange Fees are, in order to make a realistic estimate of the amount of margin being earned from the merchant by the Acquirer. Some merchants are unwittingly paying high margins to their Acquirers because they are unaware of how interchange operates and at what rates.
This project consists of the follwoing process:
- Data preprocessing with Numpy and Pandas
- Deeper analysis with SAS software
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