# What is interchange?

> 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.

Source: https://anytime-capital.com/learn/payments/what-is-interchange · Topic: Accepting payments · Updated: 2026-10-29 · Publisher: Anytime Capital

## Key facts

- **Credit interchange:** ~1.5–3% — Most US consumer credit cards, 2026
- **Regulated debit cap:** 21¢ + 0.05% — Plus a 1¢ fraud adjustment (Regulation II)
- **Debit cap applies to:** $10B+ issuers — Smaller banks' debit is not capped
- **Network assessments:** ~0.13–0.16% — Of volume, plus per-item fees (2026)
- **Schedule updates:** April, October — Visa and Mastercard, typically
- **Rate categories:** Hundreds — Per network, by card, channel and merchant
- **Negotiable?:** No — Only your provider's markup is
- **Flat-rate example:** 2.9% + 30¢ — Stripe online, published Oct 2026

Interchange is why the same $100 sale can carry about 27 cents of card-issuer fees on one card and about $2.50 on another. It is set by the card networks, paid to the bank that issued the customer's card, and sits inside every card fee a business pays, whether the statement shows it or not. This guide covers what interchange is, where it goes, what sets each rate, the rule that caps debit, how each pricing model passes it on, and what a business can and cannot do about it.

## 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.

**The three parts of a US card processing fee**

| 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 |

_Industry-typical US ranges as of 2026, from the networks' published interchange schedules and processor disclosures. The exact rate depends on the card, the merchant and how the payment was taken._

**Figure: One $100 credit card sale, split**

1. **Customer pays**: A $100 online sale on a standard consumer credit card. ($100.00)
2. **Issuer's share**: Interchange, kept by the bank that issued the card. (≈ $1.90)
3. **Network's share**: Assessment fees for running the Visa or Mastercard rails. (≈ $0.14)
4. **Provider's share**: What is left of the $3.20 flat fee after those two. (≈ $1.16)
5. **You receive**: The sale less the $3.20 total, paid out on schedule. ($96.80)

_Illustrative: interchange and assessments from the worked example further down, priced at Stripe's published 2.9% + 30¢ (October 2026). On a premium rewards card the issuer's share grows, and on flat-rate pricing the provider's share shrinks to match._

## How is interchange collected?

Interchange never appears as a separate payment. When the day's card sales clear, the network works out the interchange on each one from its category and the card used, and the issuer sends the acquiring bank the sale amount minus that interchange. The acquirer and your provider then take network assessments and their own markup before paying you.

Some merchant accounts deduct everything daily, so each payout is already net; others pay out gross sales and bill the month's fees in one debit at the start of the next month. Either way, the interchange was taken at settlement, which is why an interchange-plus statement can list it as a pass-through line and a flat-rate provider can fold it into one rate.

**Figure: Where interchange is taken out**

1. **Authorization**: The issuer approves; the card type and how it was taken are recorded. (Seconds)
2. **Clearing**: The network assigns each sale its interchange category. (End of day)
3. **Settlement**: The issuer pays the acquirer the sale minus interchange. (1–2 business days)
4. **Fees**: Network assessments and the provider's markup come off next. (Daily or monthly)
5. **Payout**: The net amount reaches your bank on the provider's schedule. (Your schedule)

_Interchange is set at clearing and deducted at settlement, before your provider's own fees. The timings are typical for US card payments in 2026._

## 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.

The cap is also being fought over in court. In August 2025 a federal district court in North Dakota ruled that the Fed had counted costs the law does not allow and vacated the rule, then stayed its own decision while the Fed appeals, so the cap still applies; the Fed's 2023 proposal to lower it has not been finalized (status as of October 2026). Debit cards from banks and credit unions under $10 billion in assets are exempt, and their interchange is set by the networks' schedules instead.

- 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

## Why do rewards and business cards cost more to accept?

Interchange pays for what the card gives its holder. A premium travel card with lounge access and generous points is funded largely by the interchange merchants pay on it, so it sits in a higher category than a basic credit card. Business and corporate cards sit higher again, because they carry larger balances, longer payment terms and richer rewards.

Business cards have one lever ordinary cards lack: enhanced data. A payment that carries invoice detail, such as the tax amount, a customer code and line items, can qualify for a lower commercial rate. Visa moved these rates into its Commercial Enhanced Data Program from April 2025 and retired its separate Level 2 rates in April 2026, so on Visa business cards it is now full line-item (Level 3) data that earns the lower rate. Ask your provider whether it sends that data; most all-in-one providers charge their flat rate on business cards either way.

**Which cards cost a business least and most to accept (US, 2026)**

| Card | Relative interchange | Why |
| --- | --- | --- |
| Regulated debit, from a large bank | Lowest | Capped by Regulation II for issuers with $10B+ in assets |
| Exempt debit, from a smaller bank or credit union | Low to moderate | Not capped; set by the networks' schedules |
| Standard consumer credit | Moderate | Pays for credit risk and basic rewards |
| Rewards and premium credit | Higher | Funds points, cash back and travel benefits |
| Business, corporate and purchasing cards | Highest, unless enhanced data qualifies a lower rate | Larger balances, longer terms, richer rewards |
| Cards issued outside the US | Higher, with cross-border fees on top | International interchange and network cross-border charges |

_Relative order only, from the networks' published schedules as of 2026. Exact rates vary by network, category and how the payment is taken._

## Do American Express and Discover charge interchange?

Not in the same way. Visa and Mastercard are four-party networks: the bank that issues the card and the bank that acquires the merchant are separate, and interchange is the fee that passes between them. American Express has traditionally been a three-party network, issuing most of its own cards and signing merchants itself, so it charges a merchant discount rate rather than interchange in the Visa sense.

Many small businesses take Amex through OptBlue, an American Express program that lets a payment provider sign the business up and set the price, which is why Amex usually sits inside the same flat rate as every other card. Discover issues most of its own cards and runs its own network, and Capital One completed its purchase of Discover in May 2025, so that network's economics may change in the next few years. On flat-rate pricing none of this changes the price of a sale; on interchange-plus, check how each brand is passed through.

## 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.

**How interchange shows up under each pricing model**

| 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.

**Illustrative interchange on a $100 online sale**

| 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 |

_Illustrative only. Real interchange depends on the network's current schedule, the card product, the merchant category and how the payment was taken._

## 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

## Is interchange going to change?

It is under pressure from two directions in 2026. For credit cards, Visa and Mastercard proposed a revised settlement with merchants in November 2025 that would lower the average effective credit interchange rate by 0.1 percentage point for five years, hold rates on standard consumer cards at 1.25%, and let merchants decline some higher-cost premium cards. A federal judge granted preliminary approval in June 2026, and the terms take effect only once the settlement is finally approved. For debit, the Regulation II appeal described above could change the cap in either direction.

Even without either, interchange moves twice a year, when the networks publish their April and October updates. A business on interchange-plus should expect its blended cost to shift a little each time; a business on flat-rate pricing sees no change unless its provider changes the rate, which is one reason flat pricing appeals to businesses that want a predictable cost per sale.

## 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.

### Does interchange apply to Apple Pay and Google Pay?

Yes. A wallet payment runs on the card stored in the wallet, so it is priced by that card's network, type and interchange category. Wallets replace the card number with a token and confirm the customer on the device, which helps approval and fraud rates, but the card behind the wallet still decides the interchange.

### Are swipe fees the same as interchange?

Not exactly. Swipe fees is the everyday name for everything a business pays to accept a card: interchange, network assessments and the provider's markup together. Interchange is usually the largest part, which is why news coverage of swipe fees, and of the Visa and Mastercard merchant settlement, is mostly about interchange.

## Related

- [How to lower credit card processing fees](https://anytime-capital.com/learn/payments/how-to-lower-credit-card-processing-fees)
- [Payment gateway vs payment processor](https://anytime-capital.com/learn/payments/payment-gateway-vs-payment-processor)
- [Anytime Capital Payments pricing](https://anytime-capital.com/business/pricing)

**One rate instead of three layers.** Anytime Capital Payments charges one published rate for every card and wallet payment, with no monthly, setup or PCI fees. See it on our pricing page, or open an account and take your first payment this week. https://anytime-capital.com/business/get-started?offer=launch-90

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- 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.