Glossary

Interchange Fee

Interchange fees are due by the merchants and paid to the cardholders issuing bank. The fee is deducted automatically alongside any other card processing fees that may be due.

Interchange is one of three main card processing fees. The interchange fee is charged by the card holders issuing bank and is paid by the merchant's bank.

The merchant must pay the interchange fee. The fee is automatically deducted when the payment is made. So when the merchant receives the funds for the transaction it will be minus the card processing fees, of which Interchange is one.

Interchange is due when a payment is made via a credit card such as Visa, American Express, or Mastercard. The merchant pays the fee. The fee is taken off automatically during the settlement process. You can find out more about how Mastercard use interchange here.

Interchange is due when a payment is made via a credit card such as Visa, American Express, or Mastercard. The merchant pays the fee, and it is automatically deducted during the settlement process. See what Visa has to say about interchange and how they process it here.

Interchange is due when a payment is made via a credit card such as Visa, American Express, or Mastercard. It is automatically deducted by the acquirer when settling with the merchant. The card scheme dictates the interchange rate so the actual sum will vary between providers.

Things that can have an impact interchange fees are:

- Geographic location: different countries have different rates.

- Sales channel: POS channels are considered less risky and therefore have lower interchange rates

- Card type: debit cards have lower rates than credit cards due to lower risk, and each credit card company will charge a different rate. Rewards cards pay for the perks given to card holders by charging higher interchange rates to businesses. However, the perks may entice the customers to spend more.

- Business size and industry: rates can vary by business type. Larger merchants often have lower rates because they have enough “clout” to successfully negotiate with banks/credit schemes. Which is why sometimes a large company may not accept your (mainstream) card scheme, as they have negotiated better rates with a competitor.

Interchange is a fee that must be paid by the merchant to the customer’s issuing bank, when a transaction is made by a debit or credit card. Interchange ++ is a pricing model that includes:

- Interchange fee

- The card scheme fee

- The acquirer fee

Interchange and Interchange++ are not interchangeable.

Interchange++ is a pricing model for credit card fees most commonly used in Europe and North America. When a card transaction is processed through an acquirer, there are three main fees that must be paid. They are:

- The Interchange fee that goes to the card issuing bank

- The scheme fee that goes to Visa or Mastercard (first +) 

- The acquirer fee (second +)

Interchange++ is available for payments made by Visa and Mastercard. It offers more transparency than other pricing models as it shows a much more detailed breakdown of costs.

Payments Explained: What is Interchange?

Further Information: