Basis points (bps) are a unit of measurement that represent a fraction of a percent. One basis point equals 0.01%. In payment processing, basis points are most commonly used in fee structures and monitoring program thresholds.

Fees

Solution providers might share processing fees as a markup over the interchange rate using basis points. For example, “interchange plus 30 bps” means a 0.30% markup. This terminology helps quantify small differences in pricing or fee structures clearly. It’s a standard used in finance, especially when dealing with recurring charges or large volumes.

Understanding basis points helps you make informed decisions when comparing processing offers. AltoPay uses transparent pricing models so you can understand exactly what you’re paying.

Thresholds

The major card brands (Mastercard and Visa) have monitoring programs to keep track of their merchants’ fraud and chargeback levels. You may be enrolled in a monitoring program if your activity breaches the set threshold. Thresholds are sometimes expressed as a percentage and sometimes as basis points. For example, 1% or 100 basis points.

AltoPay aims to simplify the complexities of payment processing, always explaining important information in a way that is easy to understand. Whether the card brand is using percentages or basis points, we can help you keep ratios within the limits.