Interchange Fees

Mastercard Interchange Fees for Restaurants

by

May 30, 2019

Restaurants that accept Mastercards may see specific restaurant interchange fees or general fees. That’s because Mastercard has restaurant-specific categories for some cards, but not others.

Specifically, Mastercard does not have a restaurant-specific category for basic consumer credit cards. However, it does have restaurant-specific categories for consumer “rewards” cards, debit cards, and prepaid cards. In this article, we’ll take a look at the credit card rates for restaurants that accept Mastercard.

Looking for a more general explanation of credit card processing costs? Check out our guide to accepting credit cards at restaurants for more information.


Mastercard Restaurant Interchange Fees

As noted in the introduction, restaurants may see restaurant-specific or general interchange categories. It largely depends on the card type. Rewards cards, debit cards, and prepaid cards have their own restaurant interchange categories, while basic credit cards do not.

Rewards Credit Rates

There are only restaurant-specific interchange categories for “rewards” credit cards, not basic cards. Rewards cards include any card that offers perks for use, such as airline miles or cash back. Basic cards (called “core”) do not offer any perks / rewards.

The current Mastercard interchange rates for restaurants accepting a rewards credit card depend on the type of rewards card. There are a few different categories, as follows.

Volume RatePer-Transaction Fee
Restaurant World1.73%$0.10
Restaurant World High Value2.20%$0.10
Restaurant World Elite2.20%$0.10

Source: Mastercard website.

Debit and Prepaid Rates

There are a few rates for debit and prepaid cards, but one of them is simply the “regulated” version of a debit category. Regulated debit cards are any cards issued by a bank that has at least $10 billion in assets. Interchange fees for regulated cards are capped by law. The current Mastercard debit and prepaid restaurant rates are as follows.

Volume RatePer-Transaction Fee
Restaurant Debit1.19%$0.10
Restaurant Debit Regulated0.05%$0.22
Restaurant Prepaid1.19%$0.10

Rates come directly from Mastercard’s interchange schedule and are subject to change.

Non-Rewards Card Rates

So, what about non-rewards consumer credit cards? They may receive Merit 3 interchange rates. That’s Mastercard’s fancy way of referring to “card-present” transactions – that is, the most common type of transaction for restaurants.

However, many factors affect interchange qualification. The transaction will “qualify” for the interchange category for which it meets all criteria. Let’s take a look at the restaurant interchange category criteria. (Merit 3 criteria for core credit cards can be found at the link above.)

Restaurant Interchange Criteria

There are several requirements for Mastercard’s restaurant interchange. Transactions and businesses must meet all requirements in order to qualify.

The business must be an eligible restaurant, with merchant category code (MCC) 5812. Fast food restaurants (merchant category code 5814) are only eligible for debit restaurant categories, not credit.

For all eligible card types (rewards credit, debit, and prepaid) the transaction must:

  • Be processed “card present” – meaning swiped, dipped, or tapped to a credit card machine
  • Provide 1 valid electronic authorization
  • Be settled within 2 days of the transaction date
  • Have a settlement MCC that matches the authorization MCC

Additionally, rewards cards must have a transaction total of $60 or less. Rewards cards used for restaurant purchases over $60 will instead receive Mastercard’s “travel and entertainment” interchange rates.

Requirements Not Met

If a transaction doesn’t meet all of the requirements noted above, it will not qualify for restaurant interchange. Instead, it will “downgrade” to a more expensive interchange category. Which category depends on which requirement was not met. If the transaction is “card not present” (keyed), it will fall to either Merit 1 or key-entered interchange. If it isn’t settled within 2 days, it will fall to Merit 1. If an electronic authorization isn’t provided or the MCCs don’t match, it will fall to Standard.

Some downgrades are unavoidable, but a lot of them indicates a problem with how you’re accepting or settling transactions. Furthermore, downgrades cost you more. CardFellow members can contact us for your free statement review to ensure you’re not paying for excessive downgrades.

Statement Abbreviations

On some processing statements, you’ll be able to see interchange categories. However, different processors can use different names or abbreviations. For rewards credit cards, you may see:

  • MCW RESTRN (short for “Mastercard World Restaurant”)
  • HV REST (for “High Value Restaurant”)
  • MWE RESTRN (for “Mastercard World Elite Restaurant”)

For debit and prepaid cards, look for:

  • MC REST D (short for “Mastercard Restaurant Debit”)
  • RESTRNT PP (for “restaurant prepaid”)

Note that not all processors provide statements that list interchange. Notably, processors that use “flat rate” pricing (such as Square and PayPal) don’t provide statements listing interchange. That doesn’t mean that you don’t pay interchange. Rather, it simply means that you don’t see which specific interchange categories and rates applied to your transaction

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Ellen Cunningham

BY Ellen Cunningham

Ellen has a degree in English, which she puts to work every day researching and writing articles, processor reviews, and social media posts. She enjoys the challenge of explaining complex topics - making her a perfect fit for credit card processing - and strongly believes in CardFellow's mission of empowering business owners through education. When she's not busy following the latest industry news, Ellen can be found cycling the beautiful trails of southern New England, narrowly losing at pub quizzes, or practicing her trapeze skills in aerial circus class.

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