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Interchange Fee

Each payment card transaction a merchant processes is accompanied by an interchange fee, which is paid to the issuing bank.

The card brands manage the interchange rate, which can fluctuate based on:

  • the type of transaction processed (card-present or card-not-present)
  • the type of card used (credit or debit)
  • the type of merchant processing the payment (low or high-risk)
  • the geographical region of the issuer

The interchange rate is usually a flat fee plus a percent of the total transaction amount. Of all the processing fees paid, the interchange fee is usually the most expensive, sometimes comprising 70-90% of all the costs associated with a transaction.

The interchange fee is not refunded in cases of a merchandise return or a chargeback.

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