by Ben Dwyer Unlike Visa’s Product 1 and Product 2 interchange, which applies to consumer credit cards, Business Product 1 and Business Product 2 apply to commercial card transactions.
Business Product 1 applies to card-not-present transactions and Business Product 2 applies to card-present transactions.There are additional “sub-categories,” determined by spend tiers 1-5. Note that Visa uses Roman numerals, so the spend tiers are I, II, III, IV, and V. Spend tiers relate to the cardholder spending requirements and range from $0 in Tier I to $250,000 for Tier V. If the information is not available, you can expect the business transaction to qualify at Tier I rates.
As of spring 2025, the rates and fees are as follows (subject to change by Visa):
Business Product 1
- Spend Tier I: 1.90% + 10 cents per transaction
- Spend Tier II: 2.05% + 10 cents per transaction
- Spend Tier III: 2.10% + 10 cents per transaction
- Spend Tier IV: 2.20% + 10 cents per transaction
- Spend Tier V: 2.25% + 10 cents per transaction
Business Product 2
- Spend Tier I: 2.65% + 10 cents per transaction
- Spend Tier II: 2.80% + 10 cents per transaction
- Spend Tier III: 2.85% + 10 cents per transaction
- Spend Tier IV: 2.95% + 10 cents per transaction
- Spend Tier V: 3.00% + 10 cents per transaction
Additionally, business cards that fail to qualify for the above interchange categories may downgrade to “Business Non-Qualified.” In that case, you can expect the following rates:
Business Non-Qualified
All tiers: 3.15% + 20 cents per transaction
Note that “Business Non-Qualified” is a downgrade category for most businesses. Some industries, such as travel, may receive non-qualified as the best possible category. If you’re unsure if business non-qualified is the best your business can do, be sure to check with your processor or CardFellow, if you chose your processor through our marketplace.
Can I control which interchange categories transactions route to?
In general, no. Your transactions will route to the category that applies based on card type, cardholder spend, etc.
However, there is one exception – downgrades. You may be able to influence behaviors to route transactions to categories with better rates than a downgrade category. For business cards, “business non-qualified” interchange is typically a downgrade category. That means the transaction could have been eligible for Business Product 1 or Business Product 2 but failed to meet the criteria to route to that category. This could be due to settlement time delays, not providing enhanced data, or other reasons. You can work with your processor to attempt to mitigate downgrades, but keep in mind that in many cases, your processor doesn’t benefit financially from helping you lower costs at the interchange level.
If you’re a CardFellow client, we provide free statement monitoring with downgrade reviews. If you chose your processor through our marketplace, give us a call for assistance with downgrades.
How to Lower Credit Card Processing Costs
Commercial credit card transactions have different rules as well as different rates and fees. It’s easy to miss qualifying for a lower-cost interchange category if you are not optimizing your commercial card acceptance. For more information, check out our guide to Level II and Level III Enhanced Data for accepting commercial cards. Additionally, it’s worth confirming that you have a competitive markup from your credit card processor, or find a new one. Sign up for a free CardFellow account to compare quotes from processors in seconds. It’s free and private, but we’re available to provide independent assistance and advice. Give it a try at www.cardfellow.com!
