What is an interchange fee?

An interchange fee is the fee a merchant's bank, the acquirer, pays to the cardholder's bank, the issuer, on each card payment. Card networks such as Visa and Mastercard set the rates, which depend on card type, channel, region and merchant category.

What drives the rate

• Card type: debit, credit, premium or commercial cards carry different rates.
• Channel: card-present and online payments are priced differently.
• Region: domestic, intra-regional and cross-border payments differ.
• Merchant category: some sectors have specific rates.
• Regulation: in some regions, such as the EU, caps apply to consumer cards.

Where it sits in the merchant's cost

Interchange is usually the largest part of what a merchant pays for card acceptance. The acquirer adds scheme fees and its own margin on top, either bundled into one rate or shown separately, as in IC++ pricing.

What it means for payment operators

Interchange shapes the economics of every platform that sets prices for merchants. Knowing it per transaction lets you price fairly and keep your margin. Reconciliation that maps provider data into one model, and analytics that show cost by card type, channel and provider, help you and your merchants see where interchange drives cost and which routing choices affect it.