Understanding Interchange Fees for Visa, MasterCard, and Discover

The term interchange often comes up in conversations related to payment and merchant service providers. Credit card companies like Visa and MasterCard charge a fee to businesses to accept their cards which is called interchange.

A lot of factors influence the interchange fee and it is a bit complicated to fully understand. Here we have broken down credit card interchange fees to help you in understanding your expenses in the business.

What is the Interchange fee?

Credit card companies charge a fee to businesses to accept their cards which is called interchange. The brand is charging you because it provides convenience to you by letting you accept its payment method which your customers desire to use.

Most of the risks that are involved when you accept electronic payments are covered by the interchange fees. With this payment method, your business is guaranteed to receive the payment for your customer’s purchase and hence the fee is charged. The interchange fee is simply put business expenditure and the cost of offering these credit card payment options to your customers.

What does interchange cost?

The current 2021 interchange fees are dependent on the card type, how the card is processed and it varies across card brands. Credit card processing is more expensive than debit card processing. Instead of keying the card, swipe it, that helps save some money as well. Banks that have less than 10$ billion in assets like local banks or credit unions have extremely high interchanges rates so you must avoid processing their debit cards.

You can choose whether to swipe the card or key the card but you cannot pick and choose between your customer’s cards. The current interchange rates vary so much because different brands charge different rates. MasterCard may charge 27 cents for a 100$ purchase but Visa corporate may charge 2.6$ for the same purchase and over a year these charges add up.

Interchange rates 2021 are listed here for your perusal-

Visa Interchange Fees

Mastercard interchange fees

Discover Interchange Fees