There is the answer, $28k of the $35k in monthly processing was via debit cards. Which has a much lower interchange rate. As long as you keep taking that % of debit cards your effective rate will stay below 2%. Congrats on those rates, very good for CNP merchant with that amount of montly volume.

Agree with Dave, race to the bottom is one of the main reasons I sold my portfolios a couple of years ago.