GlossaryTerm · Payments

What does interchange mean in payments?

By Tokenova Editorial Desk

The per-payment fee that flows from the shop's side of a card payment to your bank.

4 sources ↓
A shop-door sticker saying Visa and Mastercard cards are accepted
Photo: “Wij accepteren Visa & Mastercard at the GAMMA, Blijdorpse Polder, Rotterdam (2021) 02” by Donald Trung Quoc Don, CC BY-SA 4.0 (edited: cropped, colour-graded)

Quick answer

Interchange is a fee paid on each card payment by the merchant's acquirer to the cardholder's issuer. Visa calls these interchange reimbursement fees, transfer fees between acquiring and issuing banks⁠[1]. Some laws cap it, such as the EU's 0.2% limit on consumer debit cards⁠[2].

Key points

  • Interchange flows from the acquirer (merchant side) to the issuer (cardholder side) on each card payment.
  • Merchants fund it through the merchant discount they pay their acquirer, not as a separate bill.
  • The EU caps consumer debit interchange at 0.2% and consumer credit at 0.3%; the US caps debit interchange for large issuers.
On this page
  1. Who pays interchange and who receives it?
  2. Is interchange capped by law?
  3. Why does interchange matter to ordinary people?
  4. FAQ
  5. Sources

#Who pays interchange and who receives it?

The issuer, meaning the bank or card company that gave you the card, receives it. The acquirer, the payment company that serves the merchant, pays it. Visa says merchants do not pay interchange directly; they negotiate and pay a merchant discount to their own financial institution, which covers interchange among other costs⁠[1]. The cardholder normally pays nothing per purchase.

#Is interchange capped by law?

In some places. The EU caps interchange on consumer debit cards at 0.2% and on consumer credit cards at 0.3% of the transaction value⁠[2]. In the US, Regulation II caps debit interchange for covered issuers at 21 cents plus 0.05% of the transaction value⁠[3], plus a fraud-prevention adjustment of up to 1 cent for eligible issuers⁠[4]. US credit card interchange is not capped by that rule. The full story, including a court challenge to the US cap, is in interchange fees explained.

Worked example

Example

Maximum interchange on a 30-unit purchase under the caps above. Calculated with code.

€30 on an EU consumer debit card (0.2%)
€0.06
€30 on an EU consumer credit card (0.3%)
€0.09
$30 on a US covered debit card (21¢ + 0.05%)
$0.225, or $0.235 with the 1¢ fraud-prevention adjustment

#Why does interchange matter to ordinary people?

It is part of what merchants pay to accept cards, which the European Commission says ends up passed on through retail prices⁠[2]. It also helps fund card programmes at issuers. Knowing it exists explains why some shops prefer certain payment methods and why the type of card you use, debit, credit or prepaid, can change the merchant's cost. To see how fees add up for a merchant, try the card fee calculator.

Frequently asked questions

Is interchange the same as the merchant fee?

No. The shop pays its acquirer a merchant discount⁠[1]; interchange is only one part of it, alongside network fees and the acquirer's own margin.

Does the card network receive interchange?

Interchange goes to the issuer. Networks charge their own separate fees.

Sources

  1. Visa USA interchange reimbursement fees (merchant support page) — Visa, 2026 Primary
  2. Antitrust: Regulation on Interchange Fees (fact sheet MEMO/16/2162) — European Commission, 2016 Primary
  3. 12 CFR 235.3 — Reasonable and proportional interchange transaction fees — eCFR (US Code of Federal Regulations), 2026 Primary
  4. 12 CFR 235.4 — Fraud-prevention adjustment — eCFR (US Code of Federal Regulations), 2026 Primary

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