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Interchange in credit card processing refers to the fee paid by the merchant's bank (also known as the acquiring bank) to the cardholder's bank (also known as the issuing bank) for each transaction made using a credit or debit card. This fee is a necessary part of the electronic payment ecosystem, as it helps cover the costs associated with processing transactions, managing risk, and providing various services to cardholders.
Interchange fees are typically calculated as a percentage of the total transaction amount, Often accompanied by a fixed per-transaction fee. These fees vary depending on several factors, including the type of card used (credit or debit), the card network (Visa, Mastercard, American Express, etc.), the type of merchant, the merchant's industry, and the level of risk associated with the transaction.
Interchange rates are set by the card networks and are updated periodically. Merchants do not pay the interchange fees directly; instead, they pay a combination of fees to their payment processor or merchant service provider, which includes interchange fees, assessment fees from card networks, and processor markup fees.
You can find the interchange fee guides for Visa and Master card by clicking the two links below:
American Express and Discover Card do not currently provide interchange costs to the public in a transparent way as Visa and Mastercard do.
