What Is an Interchange Fee in Credit Card Processing? ⎊ Path

What Is an Interchange Fee in Credit Card Processing?

An interchange fee is a percentage-based fee that a merchant's bank (acquirer) pays to the customer's bank (issuer) when a credit or debit card transaction is processed. It is the largest component of the overall merchant service fee.

These fees compensate the issuing bank for the risk, fraud costs, and handling of the transaction, and are ultimately passed on to the consumer and merchant.

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