Interchange fees explained
Not sure how interchange fees actually work? You’re not alone. In this guide, we’ll break down how these rates work for different credit and debit cards and why they can vary depending on the country.
Every time a customer pays with a card, businesses have to pay an interchange fee (sometimes called an interchange rate or reimbursement fee). The tricky part? These fees aren’t always easy to predict, a bunch of factors can influence the final amount.
We’ll walk you through what affects interchange fees, where to find the latest rates, and what rules are in place to help keep things fair.
What are interchange fees?
Every time someone pays with a card (like Visa or Mastercard), the card network sends an interchange fee to the shopper’s bank. That fee is ultimately included in the charges the merchant pays for accepting card payments.
There are three main fees involved in card processing:
Acquirer markup: This is what your payment provider (acquirer) charges to process the transaction.
Card scheme fees: Charged by networks like Visa or Mastercard for using their system.
Interchange fee: Paid to the cardholder’s bank for handling the payment.
Out of all these, the interchange fee is usually the biggest fee.
How much are interchange fees?
It depends on where you are. In Europe, they’re usually around 0.3–0.4% of the transaction amount. In the U.S., they’re quite a bit higher, about 2% on average.
These fees are set by the card networks themselves, and unfortunately, they’re non-negotiable. They also get updated regularly, for example, Visa and Mastercard typically release new rates every April and October.
Want the most up-to-date info? The best bet is to head straight to the card networks’ websites. Below, you’ll find links to the current interchange rates for Visa and Mastercard across different regions.
Some card networks, like American Express and Discover, do things a little differently than Visa and Mastercard. They don’t usually share their interchange rates publicly, so it’s harder to know exactly what you're paying with those.
How are interchange fees worked out?
There’s no one-size-fits-all rate when it comes to interchange fees. A bunch of things can affect how much you’re charged. Here are the big ones:
Card network
Different networks have different rates. So a Visa transaction might cost less (or more) than one on Mastercard.In-store vs. online payments
Payments where the card is physically present (like in a shop) usually have lower fees than online transactions. Why? Less risk of fraud when the card is actually there.Your merchant category code (MCC)
This is a code that defines what kind of business you are. Some businesse, like charities, streaming services, or utility companies, can get lower rates. But heads up: you don’t choose your MCC, it’s assigned based on what you do.Type of card
Commercial or business cards usually come with higher fees than regular personal cards.Where the transaction happens
If your customer’s bank is in the same country as your business, that’s a domestic transaction, and usually cheaper. Cross-border payments tend to cost more.Rewards cards
When someone pays with a card that earns points, cash back, or miles, the fees are often higher, those perks have to be funded somehow.
Can you do anything about these fees?
Some of these things are out of your hands. For example, you can’t change your MCC, and you probably won’t convince customers to ditch their favourite rewards card.
But there are a few things you might be able to influence. For example, encouraging more in-person purchases (instead of online) can help reduce fees a bit.
Still, it’s all about balance. Trying to lower your fees by limiting how people can pay might turn some customers away, and that could cost you more in the long run.
Interchange++ vs. Blended pricing, what’s the difference?
There are two main ways your payment provider might charge you: Interchange++ and Blended pricing.
Interchange++ gives you a full breakdown of where your money's going, including the actual interchange fee, the card network’s fee, and your provider’s markup. It’s super transparent, and you only pay what the card issuer actually charges. Sometimes, this means lower costs, depending on the transaction.
Blended pricing, on the other hand, keeps it simple. You’re charged one flat rate for all transactions, no matter what. It's easy to understand, but you won’t see how the costs are split, and there’s no guarantee your provider will pass on any savings if the actual interchange fee is lower.
In short: Interchange++ is more detailed and potentially cheaper, while Blended is more predictable but less transparent.
Interchange fee rules and regulations
Back in the day, figuring out how interchange fees were calculated was a bit of a mystery. Big businesses with tons of transactions could often negotiate better deals, while smaller companies just had to pay whatever was set.
This hit hardest in markets dominated by big international card networks, businesses didn’t really have a choice but to accept the most popular cards, even if the fees were steep.
Luckily, things have started to change. Regulations have been introduced to make things fairer, putting limits on fees, setting clearer rules, and generally making the whole system more transparent.
Here’s a quick look at how fee caps work in different parts of the world:
The Durbin Amendment (U.S. only)
Introduced in 2010, the Durbin Amendment put a cap on interchange fees for debit and prepaid card transactions, but only for big banks.
If the bank that issued the card has more than $10 billion in assets, then capped rates kick in. These capped rates are typically around 0.05% + $0.21 or 0.05% + $0.22, depending on the bank’s fraud prevention measures.
Interchange Fee Regulation in Europe
In 2015, the European Economic Area (EEA) brought in tough new rules to regulate interchange fees, and it made a huge difference.
Fees for consumer cards are now capped across the EEA, which helps keep costs low. It’s one of the most affordable regions globally for card transactions, especially if you're doing cross-border payments.
Here’s a breakdown of those fee caps by region:
Regionality caps | Debit | Credit |
Domestic | 0.20% | 0.30% |
Intra-regional | 0.20% | 0.30% |
Interregional card-present | 0.20% | 0.30% |
Interregional card-not-present | 1.15% | 1.50% |