It can be interesting to compare a business’s interchange rate against the overall average interchange rate. Digital Transactions magazine reports that the average interchange rate is 1.77%.  However, an important aspect of interchange rates is that they usually have a per-item component (almost always is 0.10 for credit and 0.15 for debit) as well as volume-based component (between 1% and 3%).  For small transactions, the per-item component is most important (0.10 is 1% of a $10 lunch bill) than for large transactions.  So to make sense of the 1.77% number, we need to know the average purchase size for credit and debit cards.

According to this article at NetBanker, each year 51% of credit and debit transactions are debit which, on average, are $37 each, and 49% are credit which, on average, are $84 each.  Using those assumptions we can calculate that the average ticket size is 60.03.  If we further assume that the average per-item rate for a credit transaction is 0.10 and the average per-item rate for a debit transaction is 0.15 we can calculate that the overall per-item rate is 0.1255, from which we can calculate that the average interchange rate, broken down into the percentage component and the per item component is $0.1255 + 1.56% and from that we can draw the following chart, which is an approximate average interchange rate for each average ticket size.

This calculation is far from perfect because some of the data is old and we make several assumptions, not all of which always hold.  For example, Visa has a special small ticket category for purchases less than $15.00 where the per-item fee is only $0.04.  I will continue to look for better data.