Interchange Fee Definition
An Interchange Fee is a transaction fee that a merchant's bank (the acquirer) pays to the cardholder's bank (the issuer) every time a customer uses a credit or
An Interchange Fee is a transaction fee that a merchant's bank (the acquirer) pays to the cardholder's bank (the issuer) every time a customer uses a credit or debit card to make a purchase, representing the largest component of the total merchant discount rate. These fees are set by card networks like Visa and Mastercard and are intended to cover the issuer's costs, including fraud loss, processing, and funding the rewards programs that incentivize card usage.