Interchange Rates

Interchange Rates are specific fees that a merchant’s bank (or acquiring bank) pays to the cardholder’s bank (or issuing bank) for each credit or debit card transaction. These rates are established by the card networks, like Visa and MasterCard, and can vary depending on several factors, including the following:

  • the type of card used (e.g., standard, premium, corporate)
  • the merchant’s industry (e.g., supermarket, restaurant, online retailer)
  • the way the transaction is processed (e.g., online, in-person, via telephone)

Understanding the interchange rates is essential for merchants as it forms a significant component of the total transaction cost. Merchants often negotiate with their payment processors or acquiring banks to get the most favorable rates.

However, the card networks regularly review and update the interchange rates, which can lead to changes in the cost of accepting card payments for merchants.