The Interchange Dilemma: Why Your Costs Keep Going Up (And Who’s Really Profiting)

By Chris Austin, President of Ardiah

Twice a year, like clockwork, interchange rates increase. If you accept credit card payments, this means your costs are going up—again. But what exactly is interchange, and who’s making all the money? Let’s break it down with a little humor (because if we don’t laugh, we might cry).

What Is Interchange?

Interchange is the fee that merchants pay every time a customer swipes, dips, or taps their credit card. This fee isn’t set by your payment processor—it’s set by the card networks (Visa, Mastercard, etc.) and paid directly to the banks that issue credit cards. Yes, you read that right: the money doesn’t go to your payments provider. It goes straight to the big banks and card issuers. Think of it as their way of saying, “Thanks for using our cards—now give us more of your money.”

Who’s Really Making the Money?

If you thought your payments provider was the one raking in the cash, think again. The real winners are the card-issuing banks. Every time a customer makes a purchase with a credit card; a portion of that transaction goes to the bank that issued the card. So, while you’re frustrated about rising processing costs, Chase, Capital One, and Bank of America are booking vacations.

You might be thinking, “Well, I don’t care because I have a flat rate with Square, Stripe, or PayPal.” Hate to break it to you, but the house always wins. These providers aren’t eating the cost increases out of the kindness of their hearts—they just pass them along to you. Flat-rate pricing might look simple, but it’s designed to ensure they always make a profit, no matter what interchange does.

The Solution: Net Zero Payment Processing

What if you didn’t have to care about interchange rate hikes? What if you could eliminate processing fees altogether? That’s where dual pricing comes in.

With a dual pricing program, customers have the option to pay one price for cash and another for card payments. This model allows you to offset processing fees so they don’t eat into your margins. Many businesses have already adopted dual pricing and are seeing significant savings. It’s a legal and transparent way to take control of your processing costs.

The Facts:

• Interchange rates have historically increased every April and October.

• Businesses of all sizes pay interchange fees, and they make up the bulk of processing costs.

• The big banks make billions off interchange, not your payments provider.

• Flat-rate processing programs will always adjust their pricing to cover rising interchange costs.

• Dual pricing can help your business achieve net zero payment processing, reducing or eliminating the impact of interchange increases.

The Wrong Way to React: Switching to Venmo or Zelle

In response to rising costs, some business owners have made drastic changes—like ditching traditional credit card processing in favor of platforms like Zelle or Venmo. While this might seem like an easy fix, it comes with its own set of problems.

For one, these platforms aren’t designed for business transactions. They lack important protections for both you and your customers and using them for commercial purposes often violates their terms of service. Additionally, you could run into issues with tracking transactions for taxes, disputes, or refunds.

Instead of jumping ship to an unregulated and risky payment method, why not explore solutions that actually put you in control—like dual pricing?

My Journey in the Payments Industry

After 20 years in the banking and card industry, I started to uncover the world of payment processing—also known as merchant services, or as many business owners call it, “the necessary evil of doing business.”

My journey into payments began when I was working with business banking clients on cash flow management. Time and time again, we’d uncover just how much credit card processing fees were eating into their profits. That’s when I decided to take on the payments industry and advocate for business owners. My goal? To help businesses access lower-cost payment processing options and keep more of their hard-earned money.

At Ardiah, we provide transparent and cost-effective payment solutions, including dual pricing, so our clients can worry less about fees and focus more on growing their business. If you’re tired of being at the mercy of interchange hikes, let’s talk. We can help you take control of your processing costs and keep more money in your pocket where it belongs.

Ready to Stop Overpaying for Payment Processing?

Contact Ardiah for a free consultation and pricing evaluation. Don’t let the big banks keep winning—let’s turn the game in your favor.

Chris Austin