Answer
What is interchange?
Quick answer
Interchange is the fee a merchant's bank pays the cardholder's bank on every card payment, set by networks such as Visa and Mastercard. It is the largest part of what a business pays to accept cards, and it varies by card type, how the card is used and the merchant's category.
Updated October 2026. Evergreen page — refreshed in place as facts change.
Where does a card payment's fee actually go?
Every card fee splits three ways. Interchange goes to the bank that issued the customer's card and pays for rewards, fraud losses and the cost of credit. Assessment fees go to the card network for running the rails. The processor's markup is what your provider keeps for its service.
Interchange is the biggest slice and the one no small business can negotiate. The markup is the only part that changes when you change provider, which is why comparing providers means comparing what they add on top.
| Component | Who receives it | Typical size (2026) | Who sets it |
|---|---|---|---|
| Interchange | The cardholder's bank (issuer) | Roughly 1.5% to 3% for most consumer credit cards; far less on regulated debit | Card networks |
| Assessment fees | The card network | Around 0.13% to 0.16% of volume, plus small per-transaction fees | Card networks |
| Processor markup | Your payment provider | Whatever your pricing says | Your provider, and negotiable |
What makes one interchange rate higher than another?
Visa and Mastercard each publish hundreds of interchange categories, and they typically update them twice a year, in April and October. The same $100 sale can carry very different interchange depending on a handful of factors.
Debit is the big exception. Under the Federal Reserve's Regulation II, which implements the Durbin Amendment, debit interchange for issuers with $10 billion or more in assets is capped, at 21 cents plus 0.05% plus a 1-cent fraud-prevention adjustment under the long-standing rule. The Fed has proposed lowering that cap, so check the current figure.
- Card type: regulated debit costs least, then standard credit, then rewards and premium cards, then business and corporate cards
- Card present or not: chip and contactless payments qualify for lower rates than online or keyed-in payments
- Merchant category: some categories, such as supermarkets and charities, have their own rates
- Data sent with the payment: missing address checks, late settlement or absent invoice data on business cards can 'downgrade' a payment to a higher rate
Flat-rate, interchange-plus and tiered pricing, side by side
How interchange reaches your statement depends on your pricing model. On flat-rate pricing it is invisible: one rate covers every card, and the provider keeps the difference between that rate and the real interchange, earning more on debit and less on premium rewards cards. On interchange-plus, the real interchange and assessments are passed through at cost and the provider adds a fixed markup.
Tiered pricing sorts payments into buckets such as qualified, mid-qualified and non-qualified, with the provider deciding which bucket each payment lands in. It is the hardest model to compare, and the one to question most closely.
| Model | How it is priced | Published example (October 2026) | Good for |
|---|---|---|---|
| Flat rate | One percentage plus a fixed fee for every card | Stripe: 2.9% + 30¢ online | Predictable costs and simple statements |
| Interchange-plus | Actual interchange and assessments, plus a fixed markup | Helcim: interchange + 0.50% + 25¢ online | Higher volumes and debit-heavy card mixes |
| Tiered | Payments sorted into qualified, mid- and non-qualified buckets | Rarely published | Hard to recommend; ask for interchange-plus instead |
A worked example: one $100 sale, three cards
The figures below are illustrative interchange levels, not quoted rates, to show why the card in the customer's hand changes the real cost. Assessments add roughly another 14 cents on $100, and the processor's markup comes on top.
On flat-rate pricing the business pays the same on all three. At Stripe's published 2.9% + 30¢ (October 2026) each of these sales costs $3.20, whatever the card. On interchange-plus, the debit sale would cost far less and the rewards card more.
| Card used | Illustrative interchange | Interchange on $100 |
|---|---|---|
| Debit card from a large bank (regulated) | 0.05% + 21¢ + 1¢ | About $0.27 |
| Standard consumer credit card | About 1.8% + 10¢ | About $1.90 |
| Premium rewards credit card, online | About 2.4% + 10¢ | About $2.50 |
Can a small business lower its interchange?
Not directly: interchange is set by the networks, not by you or your provider. You can avoid paying more than you need to, and you can choose a pricing model that matches your card mix.
Anytime Capital Payments uses one published flat rate for US card and wallet payments, with no monthly, setup or PCI fees, and quotes custom pricing for businesses processing $1M+ a year. Its rate and a comparison with other providers are on the pricing page.
- Take payments in person with chip or contactless where you can, rather than keying in card numbers
- Send address and security-code data with online payments, and settle each day's payments the same day
- Move large business-to-business invoices to ACH, where there is no interchange at all
- At higher volumes, compare an interchange-plus quote against your flat rate on a real month's statement
Frequently Asked Questions
Who sets interchange fees?
Visa and Mastercard set interchange for their networks and publish the schedules, usually updating them in April and October. American Express works differently: it sets its own merchant fee, and most small businesses accept Amex through their provider's program for it. Regulators cap debit interchange for large US issuers.
Do businesses pay interchange directly?
No. Interchange is collected through your payment provider and its acquiring bank. On flat-rate pricing it is folded into the one rate you see; on interchange-plus it appears on your statement as a pass-through line, with the provider's markup shown separately.
Why is debit interchange lower than credit?
Two reasons. Regulation II caps debit interchange for issuers with $10 billion or more in assets, and debit cards carry no credit risk or large rewards programs for interchange to pay for. Credit card rewards are largely funded by interchange, which is why premium rewards cards cost merchants the most.
Is interchange-plus always cheaper than flat-rate pricing?
Not always. It tends to win at higher volumes and with lots of debit cards, but a high markup, monthly fees or a contract can erase the saving. Compare the total fees on a real month of your own payments under each quote, not the headline rates.
What is an interchange downgrade?
A downgrade is when a payment misses a requirement for its expected interchange category, such as settling late or missing address data, and is charged a higher rate instead. On interchange-plus you see the cost directly; on flat-rate pricing the provider absorbs it.
Keep reading
Important Disclosures
- Third-party fees and product details cited on this page are each company's published US pricing, or industry-typical ranges, as of the date shown and may have changed. Check current pricing with the provider before you decide.
- Information on this page is general and educational — it is not financial, legal, or tax advice.
- Anytime Capital is a fintech company, not a bank. Payment processing, banking and payout services are provided by Anytime Capital's licensed partners. Rates shown are for US card payments; international cards, currency conversion and disputes may carry additional fees shown in your dashboard before you accept a payment.