October 2022 Rate and Rule Changes

Every year, in April and October, the merchant processing rules change.

This month, Visa, Mastercard, American Express and Discover have rolled out new fee structures and rules. This blog highlights the changes which will impact a broad range of merchants.


New Continuation Fee for Certain Merchants with more than $3million of OptBlue Volume – US

OptBlue is a program that allows a small business to accept American Express cards through the merchant account provider processing the other card brands the merchant accepts. Effective October 14, 2022, American Express introduced a new 0.03% fee on all sales exceeding $3million in a rolling 12-month period, if the merchant is in an industry that has a threshold limit of $1million.

New Industry Categories/Realignment of OptBlue Industry Categories – US

American Express has added five Merchant Category Codes (MCCs) (Utilities, Insurance, Residential Rent, Online Gambling and Charity) and has created new rate structures for these industries. Simultaneously, 14 MCCs are being realigned into eight different industry categories which include the five new categories along with the existing categories Education, Government and Other. Additionally, rates for merchants in the Education and Government categories are changing.

The impact these changes will have on merchants depends upon both the merchant’s industry and transaction size.

  • Insurance, Education and Government: Impact of changes – rates decrease for all transaction sizes
  • Online Gambling: Impact of changes – rates increase for all transaction sizes
  • Residential Rent: For transactions below $150 and above $250 the rates go down but for transactions between $150 and $250 the rates go up. Given the average renter pays over $1000/month in rent, merchants in this MCC will experience lower rates overall.
  • Utilities: Rates decrease on transactions over $39. Given the average family spends significantly more than $39/month on utilities, merchants in this MCC will experience lower fees overall.
  • Charities: Fees will decrease for transactions less than $35 and over $1,200, but rates will increase for everything in between.

Excessive Authorization Attempts Fee Increases – US & Canada

US: Effective October 1, 2022, Mastercard reduced the threshold of declined issuer attempts subject to the Excessive Authorization Attempts Fee from 20 to 10. Therefore, each authorization attempt after 10 previously declined attempts on the same card and the same card acceptor ID within a 24-hour period is now subject to the fee. The amount of the fee will also increase as follows:

  • Effective January 1, 2023: fee amount increased from $0.10 to $0.15
  • Effective January 1, 2024: fee amount increased from $0.15 to $0.30
  • Effective January 1, 2025: fee increased from $0.30 to $0.50

Canada: Effective November 1, 2022, Mastercard will reduce the threshold of declined issuer attempts subject to the Excessive Authorization Attempts Fee from 20 to 10.  On November 7, 2022, the fee will increase from C$0.10 to C$0.50. Each authorization attempt after 10 previously declined attempts on the same card and the same card acceptor ID within a 24-hour period will be subject to the fee. 

Processing Day Modifications – Global

Effective October 14, 2022, MasterCard will include Sunday as a processing day globally except for Canada, where this change will become effective January 20, 2023.  As a result, Sunday will count towards the number of days in which a transaction must be settled to avoid interchange downgrades. 

Nonprofits Excluded from New Subscription Billing Rules – Global 

After initially including nonprofits in the scope of its new subscription billing rules which took effect September 22, 2022, Mastercard announced in an October 11, 2022 bulletin that the requirements will only apply to nonprofits that have excessive chargebacks for four consecutive months.

Changes to B2B Virtual Payments Program – US

Visa is enhancing the B2B Virtual Payments Program by expanding the list of qualifying Merchant Category Codes (MCCs) and adding new programs and rates to more fully support the B2B travel segment. Visa is also introducing a new Visa Flexible B2B virtual card product globally. The new virtual cards are for card not present transactions only. 

New Commercial B2B Interchange Program – US

Discover has introduced a Commercial B2B Interchange Program which applies to all purchase transactions with a Commercial B2B card. The rate for non-reloadable prepaid cards is 0.00% + $0.00, and the rate for credit is 6.00% +$0.00. The rates apply to all MCCs.

Changes to Public Services Interchange Program – US

Discover is introducing new rates for its Public Services Interchange Program. Consumer Exempt Debit and Consumer Exempt Prepaid sales less than or equal to $200 will be charged a rate of $0.90% +$0.20. Sales greater than $200 will be subject to the new maximum $2.00 rate.

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