What Are Interchange Fees ?

Interchange fees are the fees charged by card issuers to merchant acquirers for processing credit and debit card transactions. Interchange fees are set by the card networks (Visa, Mastercard, Discover, American Express) and typically range from 1-3% of the transaction amount. The actual interchange fee that a merchant pays is determined by the card type (e.g., credit, debit, corporate, rewards), card issuer (e.g., Chase, Bank of America), and merchant category code (MCC).
 
Interchange fees are generally passed on to merchants in the form of higher processing rates. For example, if a merchant is paying 2% + $0.30 per transaction, the interchange fee is likely to make up a large portion of that rate.
 
While interchange fees are generally non-negotiable, there are some things that merchants can do to reduce their costs. For example, many acquirers offer tiered pricing, which gives discounts on processing rates for merchants who process a high volume of transactions or meet certain other criteria. Additionally, some acquirers offer interchange optimization, which is a service that analyzes a merchant's processing data and re-negotiates rates with the card issuer in order to get lower interchange fees.
 
What Are Interchange Rates ?
 
Interchange rates are the fees charged by card issuers to merchant acquirers for processing credit and debit card transactions. Interchange rates are set by the card networks (Visa, Mastercard, Discover, American Express) and typically range from 1-3% of the transaction amount. The actual interchange rate that a merchant pays is determined by the card type (e.g., credit, debit, corporate, rewards), card issuer (e.g., Chase, Bank of America), and merchant category code (MCC).
 
Interchange rates are generally passed on to merchants in the form of higher processing rates. For example, if a merchant is paying 2% + $0.30 per transaction, the interchange rate is likely to make up a large portion of that rate.
 
While interchange rates are generally non-negotiable, there are some things that merchants can do to reduce their costs. For example, many acquirers offer tiered pricing, which gives discounts on processing rates for merchants who process a high volume of transactions or meet certain other criteria. Additionally, some acquirers offer interchange optimization, which is a service that analyzes a merchant's processing data and re-negotiates rates with the card issuer in order to get lower interchange rates.
What Is an Interchange Fee ?
 
An interchange fee is a fee charged by card issuers to merchant acquirers for processing credit and debit card transactions. The actual interchange fee that a merchant pays is determined by the card type (e.g., credit, debit, corporate, rewards), card issuer (e.g., Chase, Bank of America), and merchant category code (MCC).