Basis Point

Basis Point

one one-hundredth of a percent; one basis point is 0.01% or 0.0001 in a decimal; 10 basis points would be 0.10% or 0.0010 in a decimal; 35 basis points would be 0.35% or 0.0035; 100 basis points would be 1.0% or 0.0100. The decimals are used to multiply to determine an amount. Most of the time basis points refer to interchange pricing models and refer specifically to processor margin. So if a merchant is processing $20k in Visa, Mastercard, and Discover volume and they are paying .25% margin or 25 basis points; the merchant is actually paying $50 in margin to the payment processor.

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