What-are-interchange-rates_-a-detailed-guide

1. What Are Interchange Rates?A Detailed Guide An interchange rate is the fee charged by a card issuer to a merchant’s bank for processing a credit or debit card transaction. The fee is generally a percentage of the total transaction amount, plus a per-transaction fee.

2. In the United States, interchange fees are set by the major credit card networks (Visa, Mastercard, Discover, and American Express) and are paid to the card issuer. The card issuer then pays a portion of the fee to the merchant’s bank.

3. Interchange fees vary depending on the type of card used, the type of transaction, and the size and location of the merchant. For example, interchange rates for credit cards are generally higher than those for debit cards, and interchange fees for business-to-business transactions are generally higher than those for business-to-consumer transactions

4. In addition to the interchange fee, merchants also pay a separate “acquiring bank” fee, which is charged by the merchant’s bank for processing card transactions. The acquiring bank fee is generally a percentage of the total transaction amount, plus a per-transaction fee. The total amount paid by the merchant in fees (interchange fee plus acquiring bank fee) is called the “merchant discount rate.

5. In the United States, the major credit card networks (Visa, Mastercard, Discover, and American Express) set interchange fees for credit and debit card transactions. The interchange fee is paid by the merchant’s bank to the card issuer. The card issuer then pays a portion of the fee to the merchant’s bank.

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