Rate Creep: The Industry's Quietest Revenue Model

What the FTC alleged in one case

In a July 2022 complaint, the Federal Trade Commission alleged that First American Payment Systems typically raised its rates for merchants, including its percentage markups for merchants on cost-plus pricing, at least once a year and sometimes twice a year. It alleged that sales agents' annual savings claims assumed rates would stay constant and did not tell merchants their rates would almost always increase during the term. The company paid $4.9 million to settle, according to the FTC. These are allegations and settlement terms about one company; they do not show that any other provider does the same. They do show why a written markup and change-notice terms matter.

Three things that raise a bill

A higher bill is not always creep. First, card mix: if more customers pay with rewards credit, business cards or online, interchange rises. Visa's April 18, 2026 schedule lists exempt debit at 0.80% + $0.15 under CPS/Retail but 1.65% + $0.15 under CPS/Card Not Present, and consumer credit Product 2 (card present) at 1.51% + $0.10 to 2.30% + $0.10 depending on the card product. Second, network schedule changes: Visa's schedule is dated and states the date rates take effect, so compare the effective date with the month your costs moved. Third, provider pricing: a higher markup, a new fee or a larger fee. Only the third is rate creep.

The tiers inside the schedule reset on Visa's timetable

Two of the moving parts are published, which makes them checkable. Visa's US interchange schedule carries an effective date, currently April 18, 2026, and the qualification tiers inside it are recalculated on their own cycle. Visa's credit performance threshold table for retail and supermarket categories is stated as effective April 18, 2026, based on 12 months of activity ending September 30, 2025, and each threshold is defined by a transaction volume maximum, a gross sales maximum, a minimum dispute financials ratio and a PCI compliance requirement: retail Threshold I at 133.4 million transactions and $8.83 billion, Threshold II at 86.3 million and $4.73 billion, Threshold III at 19.2 million and $1.08 billion, each with a 0.020% minimum dispute financials ratio calculated as a percentage of the merchant's gross transaction count. Those figures sit far above a small business, so for most merchants the relevant rows are Product 2 and the card-not-present programs rather than the threshold tiers. The card product the customer carries moves the rate more than anything you control.

The regulated debit line should not drift

One line on your statement has a ceiling set by regulation rather than by a network schedule. Under the Federal Reserve's Regulation II, 12 CFR 235.3, an interchange fee a covered issuer may receive on an electronic debit transaction may be no more than 21 cents plus 5 basis points of the transaction value, and 12 CFR 235.4 allows a further cent for issuers that meet the fraud-prevention standards. Visa's schedule shows that ceiling in its regulated columns as 0.05% + $0.21. So if your effective rate rose while your regulated debit volume and its interchange line stayed flat, the increase came from somewhere else: the markup, the fixed fees, or a shift in mix towards credit and card-not-present rows. Ask for the split before you accept a card-mix explanation.

The three-statement check

Put three consecutive statements side by side. For each, write down total card sales, total fees, and the effective rate (fees divided by sales). Illustrative example only, with made-up round numbers: $30,000 of sales and $870 of fees is 2.90%; if two months later the same sales produce $930 of fees, the effective rate is 3.10%. Then compare line by line: the markup percentage and per-item fee on an interchange-plus statement, the tier rates on a tiered statement, and every fixed fee by name. A line that is new or larger, with no matching change in your sales, is the one to question.

Separate markup from card mix

If the processor says the rise is card mix, ask for an interchange-level report for both months. On interchange-plus pricing the markup line should be the same percentage and per-item fee each month; if it moved, the markup changed. On tiered or blended pricing you usually cannot separate the two without that report, which is one reason to ask for interchange-plus.

Protect yourself in the contract

Before signing, ask for the markup and every fee to be stated in the agreement, and read the clause that says how pricing can change and how you will be notified. Note the renewal dates. If you find an increase you did not agree to, raise it in writing, ask for a corrected rate and a credit, and keep copies. This is general information, not legal advice (September 17, 2026); your rights depend on your agreement and the law that applies to it.

About the rate tables on this page: Visa is the only card network that publishes a public US merchant interchange schedule, so the rate tables on this site are Visa-only. Mastercard, American Express and Discover do not publish an equivalent US merchant schedule, and their rates are neither shown above nor implied by these figures. Ask your processor for the rates that apply to each network on your account.