Interchange

What interchange is

When a customer pays by card, your acquiring bank pays interchange to the customer’s issuing bank. Your business covers that cost as part of its card-processing fees. The issuer receives the fee, while the card network sets the interchange categories and rates.

Interchange is one of three parts of your card costs: interchange, network fees and your processor’s markup. It compensates the issuer for costs and risks tied to issuing cards and handling payments. Interchange applies to credit and debit card transactions, not ACH payments.

You cannot negotiate the interchange rate, but you can influence which rate your transactions qualify for.

What moves your interchange rate

The card, how you accept it and the information you submit affect the interchange category. A premium rewards or commercial card, for example, can land in a different category from a basic debit card. A card-not-present sale is also treated differently from a card-present sale.

For eligible business-to-business transactions, sending Level 2 or Level 3 data can qualify the transaction for a lower category. Missing data or a late batch can cause a transaction to qualify at a more expensive rate. Your processor cannot negotiate the network’s rate, but your transaction practices affect which rate applies.

The debit-card rule that can lower costs

As of 2026, debit cards issued by banks with at least $10 billion in assets are subject to a cap of 21 cents plus 0.05% of the transaction and a 1-cent fraud-prevention adjustment. Regulation II also requires at least two unaffiliated networks on each debit card.

That network choice gives your business a way to route eligible debit transactions to a lower-cost network. The cap remains in force as of 2026, while a court order challenging the rule is stayed pending appeal.

Where interchange appears on your statement

On an interchange-plus statement, interchange is usually itemized by category, with lines such as “VS CPS Retail” or “MC Merit III.” Compare those pass-through charges with your processor markup. On tiered pricing, interchange is blended into the rate, so you cannot see the underlying category costs clearly.

Do not treat every network-related line as interchange. Assessment fees and authorization fees are separate network charges. Separating these three layers helps you identify what your processor controls and what it does not.

What you can actually change

You cannot bargain down the network’s interchange schedule. You can control avoidable downgrades and negotiate the processor markup, which is the only one of the three cost layers that is negotiable.

- Settle batches daily and submit complete transaction data. - Send Level 2 or Level 3 data on eligible business-to-business sales. - Route regulated debit transactions over a lower-cost available network. - Compare your itemized interchange categories with the markup on an interchange-plus statement.

1. 01
   Get itemized pricing. Use interchange-plus pricing so you can see interchange separately from network fees and processor markup.
2. 02
   Send complete data. For eligible B2B transactions, confirm your point-of-sale or accounting system submits Level 2 or Level 3 data.
3. 03
   Review debit routing. Check whether your processor supports routing eligible debit transactions across the unaffiliated networks available on the card.

Frequently asked questions