Discover Interchange Rates: A Comprehensive Guide

Discover regularly updates its interchange fees, but unlike other major card networks like Visa and Mastercard, Discover doesn’t publicly post these rates online. You can access these rates through your payment processor by accessing a link and verification code. This can make it challenging for merchants to stay informed about the credit card processing fees they’re being charged. Fortunately, we’ve done the research to keep you up-to-date with the latest Discover interchange rates and fee structures.

In this post, we'll explore how Discover's interchange fees differ from other card networks, provide an overview of the most recent rate updates, and explain how these fees impact your business.

Discover Interchange Fees: Credit Card Processing Fees Explained

Discover is unique in the payment industry because it directly issues its own credit cards, unlike Visa or Mastercard, which rely on third-party banks to issue cards. This means that Discover's interchange fees are not split between the card network and the issuing bank. Instead, Discover is paid directly by the merchant’s credit card processor for each transaction.

This direct approach simplifies the interchange fee structure, making it easier for merchants to understand. Speaking to a payments consultant can also provide clarity, and help to achieve your desired result faster. Discover’s fees are primarily influenced by the transaction environment (e.g., card-present vs. card-not-present) and the type of card used. Unlike other card networks, Discover places less emphasis on the merchant category code (MCC) when determining fees.

Discover Interchange Updates: Verified August 2024

Discover has implemented several updates to its interchange rates starting for 2024. These changes may affect your processing costs, so it's crucial to monitor your January and February statements for any variations.

Key Updates Include:

‍- Program Integrity Fee Increase: Discover has doubled its Program Integrity Fee from $0.05 to $0.10 per transaction. To minimize the impact of this fee, merchants are advised to batch and settle all sales daily, electronically obtain authorizations, and use Address Verification Service (AVS) for manually entered transactions.

New Discover Interchange Rate Increases & Updates (April 2023)

Discover made several changes to its interchange rates effective April 13, 2023. Here are some of the most significant updates:

- Commercial Large Ticket PP: Increased to 1.45% + $35 (from 0.90% + $20).
- Supermarket/Warehouse Clubs Premium: Increased to 1.65% + $0.10 (from 1.60% + $0.10).
- Restaurants DB: Increased to 1.19% + $0.10 (from 1.14% + $0.15).
- Retail Premium Plus: Increased to 2.25% + $0.10 (from 2.17% + $0.10).
- Ecommerce Secured Premium Plus: Increased to 2.40% + $0.10 (from 2.35% + $0.10).
- Petroleum Core: Increased to 1.80% + $0.05 (from 1.55% + $0.05).

Discover rolled out new changes in October 2022, including the introduction of a Commercial B2B Interchange Program in the U.S. This program offers specific rates based on the card's IIN/BIN range, with rates ranging from 0% + $0 for some transactions to 6% + $0 for others.

Common Discover Interchange Rates by Category

Here’s a closer look at some of the most common Discover interchange rates:

Card-Present Transactions:
- Basic Credit: 1.56% + $0.10
- Rewards Credit: 1.71% + $0.10
- Premium Plus Credit: 2.15% + $0.10
- Commercial Credit: 2.30% + $0.10

Card-Not-Present Transactions:
- Basic Credit: 1.87% + $0.10
- Rewards Credit: 1.97% + $0.10
- Premium Plus Credit: 2.40% + $0.10
- Commercial Credit: 2.30% + $0.10

Recurring Transactions:
- Debit Recurring: 1.20% + $0.05
- Consumer Credit Recurring: 1.35% + $0.05
- Commercial Recurring: 2.30% + $0.10

International Transactions:
- International Basic Credit: 1.20% + $0.00 (Card-Present)
- International Rewards Credit: 1.65% + $0.00 (Card-Present)
- International Commercial Credit: 1.90% + $0.10 (Card-Not-Present)

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While Discover does not publish its interchange rates online, the structure is generally easier to understand due to Discover's direct issuing model. The rates are primarily influenced by card type and transaction environment, making them relatively straightforward. However, even though interchange fees are non-negotiable, you can still negotiate other aspects of your processing costs. Processors typically add a markup on top of the interchange fees, if the data is not passed properly from your payments system to the Network you will pay higher costs, and this is where you can potentially save money. For the most accurate and up-to-date interchange rates, always refer to your latest merchant statements and consider tools like Staitment to verify the accuracy of your fees.

If you have further questions about Discover interchange, Visa interchange rates, AMEX interchange, or Mastercard interchange, the payments experts at SwipeSum are here to help. We take pride in being your outsourced Chief Payments Officer. We’re happy to look over your statement and make sure you’re paying the proper interchange rates. We’ll even take a look at your processor to see if you’re getting the best solution at the lowest rate! Visit us at SwipeSum.com to get started.