Payments
Interchange fee
Updated
An interchange fee is the charge paid by the merchant's acquirer to the cardholder's issuing bank on each card payment, set by the card network.
Interchange is the largest part of what a card payment costs. On every sale, the acquirer pays the issuer a fee set by the network's rate tables, and that cost is passed to the merchant inside its processing price.
Rates vary with the card type (debit, credit, premium, commercial), the country, whether the card was present, and the merchant's category. Stripe notes that merchant category codes are often used to calculate interchange fees, and that eligible tokenised payments can qualify for lower interchange rates.
How much of this a merchant sees depends on its pricing. On a blended plan, interchange is folded into one flat rate. On interchange-plus pricing, the merchant pays the actual interchange plus the network and provider fees, so cheaper cards cost less.
Frequently asked questions
- Who receives the interchange fee?
- The cardholder's issuing bank. The acquirer pays it and passes the cost to the merchant.
- Can a merchant lower interchange?
- Partly: accurate merchant category codes, complete transaction data and network tokens can qualify payments for lower rates. The rates themselves are set by the networks.
Sources
- Set merchant category codes — Stripe
- Authorization Boost — Stripe