his is the seventh article in a series written in response to numerous reader requests for definitions of the various interchange levels. We are working with several industry experts to explain the interchange "buckets," and how transactions are assigned to the processing levels. For the most current rates, please refer to the table distributed with our August 25, 2003 issue of The Green Sheet.

Visa Custom Payment Service (CPS) Small Ticket Rate

Only consumer card types qualify for this rate. The transaction must meet all existing CPS fee edit criteria.

The transaction must occur at a merchant assigned one of the merchant category codes (MCCs): 4111 (local commuter transport); 4121 (taxicabs and limousines); 5812 (restaurants); 5814 (fast food restaurants); 7523 (parking lots and garages); 7832 (movie theaters); or 7841 (video rental stores).

The amount of the transaction must be less than or equal to $15.

Visa Express Pay Rate

To qualify for this rate, the merchant must be registered through its acquirer who must put a special indicator in the settlement record; no authorization is required.

The merchant does not have to obtain the cardholder signature or provide a transaction receipt unless one is requested.

The rate is restricted to restaurant, fast food, parking garages and movie theaters for transactions of less than $25. The parking garage maximum is $75. These transactions must be settled within three days.

Visa CPS Account Funding Rate

To qualify for this rate, the card and the cardholder are not at the merchant location and the cardholder is funding a host-based pre-paid product, a brokerage account or escrow account with a Visa credit or debit product in a secure Internet environment.

The magnetic stripe cannot be read. The point-of-sale terminal application must be equipped to provide additional data such as the merchant order number and customer service telephone number. Only one authorization per clearing transaction is allowed.

An Address Verification Service (AVS) request and Cardholder Verification Value 2 (CVV2) are required in authorization.

Visa Signature Card Electronic Rate

To qualify for this rate the merchant must be a Travel & Entertainment MCC. If the transaction meets CPS requirements, an electronic authorization is required; it can be keyed or swiped and the transaction must be settled within two days.

Visa Signature Card Standard Travel & Entertainment (T&E) Rate

To qualify for this rate the merchant must be a T&E MCC. Transactions that fail to meet CPS requirements or electronic transactions that are settled more than 72 hours from the transaction date or a paper transaction qualify for this rate.

NOTE: Visa Signature and Infinite cards are premium products for high-end consumers. The cards have no pre-set spending limits and come with enhanced services and rewards. Visa Consumer Standard Rate

To qualify for this rate the transaction will fail to meet any of the CPS categories, for example, an electronic transaction settled more than 72 hours from the transaction date or a paper transaction.

NOTE: Interchange fees are paid by the issuer to the acquirer on merchandise credits or credit vouchers. The interchange fee for a credit voucher transaction is determined by the combination of card type and merchant segment.

Visa Passenger Transport Credit Rate

All card types with passenger transport MCCs 3000-3299, 4112 and 4511 qualify for this rate.

Visa Non-Passenger Transport Credit Rate This transaction rate is for consumer cards with non-passenger transport MCCs (all MCCs except 3000-3299, 4112 and 4511) and commercial cards with non-passenger transport MCCs (all MCCs except 3000-3299, 4112 and 4511).

Visa Select Mail/Phone Order/e-Commerce Credit Rate

To qualify for this rate, more than 70% of the dollar volume of the merchant's consumer sales processed during the prior three months must have received one or more of the following rates: CPS/Card Not Present, CPS/e-commerce Basic or CPS/e-commerce Preferred.

To find more articles in this series, please visit our Web site, www.greensheet.com, and use our Fast Finder and search for 'Interchange Untangled'.