Interchange Downgrades — How EIRF and Standard Fees Drain Profits
If you’re seeing terms like “EIRF” or “Standard” on your credit card processing statement, those aren’t card types — they’re penalty categories assigned by Visa and MasterCard when a transaction breaks certain rules. And they could be quietly draining hundreds or even thousands per month in extra fees — before your processor even adds their markup.
What Is an Interchange Downgrade?
Every credit card transaction is designed to qualify for a specific interchange category — but if it’s missing certain data or breaks timing rules, it gets downgraded to a more expensive category like EIRF or Standard.
Even if you’re on interchange-plus (cost-plus) pricing, downgrades still apply. That model gives you transparency — not protection.
Common Triggers for Interchange Downgrades
- Settling transactions more than 2 days after authorization
- Missing or invalid ZIP code
• For keyed-in merchants: Visa requires a ZIP code to be entered (it doesn’t have to match)
• For retail/card-present merchants: the ZIP must match to qualify for CPS Retail - Improper use of pre-auths or settling for a different amount without re-authorization
- Not batching out daily
- Missing Level 3 data on commercial card payments does not trigger a downgrade — but it will prevent access to Level 3 and default to a higher category like Level 1 or CPS
Real Example – Visa Consumer Credit (Non-Rewards)
| Interchange Category | Rate | What It Means |
|---|---|---|
| CPS Card-Not-Present | 1.80% + $0.10 | AVS entered, settled on time |
| EIRF (Downgrade 1) | 2.30% + $0.10 | AVS missing or settled after 2 days |
| Standard (Downgrade 2) | 2.95% + $0.10 | Expired auth, late batch, or missing key data |
On a $1,000 transaction:
- CPS = $18.10
- EIRF = $23.10 (+$5)
- Standard = $29.60 (+$11.50)
If you’re processing $100K/month and even 20% are downgrading to Standard — that’s ~$1,800/month in avoidable interchange.
How to Prevent Interchange Downgrades
- Always enter a ZIP code (even for keyed-in transactions)
- Settle same-day or within 2 days
- Avoid pre-auths unless absolutely necessary — and re-auth if the final amount changes
- Pass Level 2/3 data for commercial card payments or B2B payments to qualify for Level 3 rates
- Review your statements for “EIRF” or “Standard” — these are red flags that signal missed savings
Need Help Spotting Downgrades?
If you’d like a second set of eyes on your statement to see where these fees are showing up — We are happy to help. No obligation. Just clarity.
888 790 3450 or info@ revolution-payments.com