Interchange optimization: the quiet way processors save you money
Of all the fee-reduction tools a processor can offer, interchange optimization is the one that requires the least effort from a merchant and is the easiest to misunderstand.
What interchange actually is
Interchange is the fee set by the card networks and paid to the card-issuing bank on every transaction. It isn't set by CardConnect or any other processor — it's a published rate schedule that varies based on the card type, the industry, and crucially, how much information accompanies the transaction. A transaction that includes more detail — tax amount, invoice number, customer PO number — can qualify for a lower interchange rate than the same transaction with less data attached.
How optimization works in practice
Interchange optimization means the processing system automatically fills in the additional data fields a transaction is eligible for, so it qualifies for the lowest interchange rate available rather than defaulting to a higher-cost category simply because a field was left blank. This is especially relevant for B2B and government transactions, where 'Level 2' and 'Level 3' data — things like sales tax, line-item detail and customer codes — can meaningfully lower the rate on commercial and purchasing cards.
| Data level | Typical extra fields | Where it matters most |
|---|---|---|
| Level 1 | Basic card and amount data only | Standard consumer retail transactions |
| Level 2 | Sales tax amount, customer code | B2B purchases, invoicing |
| Level 3 | Line-item detail, freight, PO number | Government and large commercial accounts |
What it doesn't do
It's important not to overstate this: interchange optimization doesn't change what a customer pays, and it can't turn a consumer retail transaction into a discounted commercial one if the underlying card and data genuinely don't qualify. It also doesn't replace negotiating the processor's own markup — it works alongside that negotiation, not instead of it. Think of it as making sure you're not leaving eligible discounts on the table, rather than a new source of savings on top of everything else.
This article reflects independent research and general industry knowledge as of September 2026, not an official CardConnect publication. Pricing, features and terms change — confirm current details directly with CardConnect or your sales representative at cardconnect.com.