The largest, least negotiable piece of every card transaction
Interchange is the fee paid to a cardholder's issuing bank every time their card is used, and it typically represents the largest single component of a merchant's total processing cost. Unlike processor markup, interchange rates are set by the card networks (Visa, Mastercard, Discover, American Express) and applied uniformly to all processors, which is why no provider can offer a 'special' interchange rate. This guide explains how interchange works, why it varies, and how it flows through to your statement.
Card networks publish interchange rate tables (updated periodically, often twice a year) that assign a rate to each combination of card type, transaction method, and merchant category. The issuing bank keeps this fee as compensation for extending credit, funding rewards programs, and absorbing certain fraud risk.
Rewards and corporate cards typically carry higher interchange because issuers fund cardholder rewards from that fee. Card-not-present transactions (online, phone, mail order) generally carry higher interchange than card-present swipes or dips, reflecting higher fraud risk. Debit cards typically carry the lowest interchange of all.
If you're on interchange-plus pricing, your statement should show interchange as a distinct line item plus your processor's markup on top. On flat-rate pricing, interchange is baked into the single quoted rate, which means your provider is effectively averaging their margin across card types rather than passing each cost through individually.
For a $75 in-person purchase, a basic debit card might carry interchange of roughly $0.30–$0.50, while a premium rewards credit card on the same purchase might carry interchange closer to $1.50–$2.00. The processor's markup is typically similar across both, meaning the customer's card type — not your processor — drives most of the difference. Figures are illustrative only.
You can't negotiate interchange itself, but you can influence which tier a transaction qualifies for by using EMV chip/tap acceptance, batching promptly, and capturing address/CVV data for card-not-present sales — all of which reduce the chance of a downgrade to a higher-cost tier.
No — interchange is set by the card networks and applies uniformly across processors; only the processor's own markup is negotiable.
Card networks typically update interchange schedules on a periodic basis, commonly around spring and fall, though specifics vary by network.
Card-not-present transactions generally carry higher interchange due to greater fraud risk compared with in-person chip or tap transactions.
It offsets the total cost at checkout rather than eliminating interchange itself, which is still charged behind the scenes by the card networks.
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