Interchange

The fee taken from every card payment and sent back to the bank that issued the card.

Whenever a customer pays with a credit or debit card, a small cut of that transaction, known as the interchange fee, goes to the cardholder’s bank (the issuer). This fee compensates the bank for taking on fraud risk, offering credit, and managing the customer relationship.

Interchange is what powers credit card rewards and what makes card issuing a profitable business. It’s also why businesses often prefer ACH or direct payments to reduce cost. Card networks (like Visa and Mastercard) set baseline interchange rates, but they can vary by region, card type, and industry.