Short answer
Interchange is a fee paid on every card payment to the bank that issued the customer's card. It is usually the largest part of the cost of accepting cards. The rate depends on the card type and the way the payment is taken, and in some countries consumer card rates are capped by regulation.
Part of Fees and pricing models. Start with the main guide: Interchange plus vs blended vs flat rate: which pricing model costs less?
Key takeaways
- Interchange goes to the card issuer, not to your provider or the card scheme.
- Rates vary by card type, whether the payment is in person or online, and where the card was issued.
- Consumer debit and credit interchange is capped in the UK and EEA at 0.2% and 0.3%. Commercial and international cards are not.
- In the US, the Durbin cap limits debit interchange for larger banks, while smaller banks are exempt.
- Interchange plus pricing shows it as a separate line, while blended pricing hides it inside one rate.
When a customer pays by card, money moves in a chain. The customer's bank (the issuer) pays out. The business's provider (the acquirer) receives. Between them, the issuer charges a fee for the service of lending or holding the customer's money and carrying the fraud risk. That fee is interchange.
Interchange is the single biggest ingredient in the cost of accepting cards, and it is the one that businesses understand least. This guide explains who receives it, how it is set, why it changes from one payment to the next, how regulation caps it in some places, and how to see it on your own statement.
What is interchange and who gets it?
Three parties take a share of every card payment. It helps to see them side by side.
- Issuer receives interchangeThe customer's bank. Pays for fraud cover, funding and rewards.
- Card scheme receives scheme feesVisa, Mastercard and others. Pays for the network and brand.
- Acquirer or provider keeps a markupThe company that provides your terminal and account. This is its margin.
The three layers behind one card fee.
The three together make up the cost of a card payment. On an interchange plus statement they appear as separate lines. On a blended or flat-rate statement they are hidden inside one rate. See interchange plus, blended and flat rate pricing for how each presents them.
Why do interchange rates differ from payment to payment?
Interchange is not one number. The same business can pay a dozen different rates in the same month. The main factors are:
- Card type. Consumer debit, consumer credit, commercial and corporate cards, prepaid cards and premium rewards cards all have different rates.
- How the payment is taken. Card present (chip and PIN or contactless) is cheaper than card not present (online or phone), because the fraud risk is lower.
- Where the card was issued. A UK card used in a UK shop is domestic. A card issued abroad can attract a higher rate.
- The scheme. Visa and Mastercard set their own rate tables, and other schemes have theirs.
- Regulation. Some card types are capped by law in some regions.
For a detailed look at how debit, credit and commercial cards differ, see our guide to debit, credit and commercial card fees.
Where is interchange capped?
Regulators have stepped in to limit interchange in several markets. The rules differ, and they change, so always check the current position.
UK and the European Economic Area
The EU Interchange Fee Regulation caps interchange on consumer cards at 0.2% for debit and 0.3% for credit, and the UK kept those caps for domestic payments after leaving the EU. Commercial and corporate cards are not capped in the same way. For card-not-present payments between the UK and the EEA, the cross-border rates became higher after Brexit, at 1.15% for consumer debit and 1.5% for consumer credit, according to the UK Payment Systems Regulator's review. The PSR has proposed measures to address this, and the outcome should be checked against its latest publications. See our guide to UK interchange caps and the PSR review.
United States
The Durbin Amendment caps debit interchange for banks with more than $10 billion in assets. The cap is 21 cents plus 0.05% of the transaction, with a further 1 cent allowed where the issuer meets fraud-prevention standards. Banks below the size threshold are exempt, so the interchange on a debit card depends on who issued it. Credit card interchange is not capped by the same rule. See our guide to US processing fees.
Australia
The Reserve Bank of Australia published its conclusions on 31 March 2026. Most changes take effect on 1 October 2026, including lower interchange caps and the end of card surcharging. We cover this in Australia's 2026 RBA changes.
New Zealand
The Commerce Commission has set caps for personal and commercial cards. A final decision in October 2026 caps commercial credit card interchange, with the new caps due to take effect in April 2027. See our New Zealand guide for the detail.
South Africa
The South African Reserve Bank regulates interchange rates for certain payment streams, and a review of the methodology was under way at the time of writing. The regulated figure is only one part of what a merchant pays, because provider pricing sits on top. See South Africa's card machine fees.
| Market | What is regulated | Status |
|---|---|---|
| UK and EEA | Consumer debit 0.2% and consumer credit 0.3% on domestic payments | In force. UK to EEA card-not-present payments were under review |
| United States | Debit interchange for issuers above $10 billion in assets | In force (Durbin). Smaller issuers exempt |
| Australia | Domestic interchange caps and surcharging | Reforms effective from 1 October 2026 |
| New Zealand | Personal card caps and new commercial credit caps | Commercial credit caps due 22 April 2027 |
| South Africa | Interchange for certain payment streams | Regulated by the Reserve Bank, review under way |
Consumer debit and credit, by transaction type. Source: PSR and EU regulation. Rates change, so check the latest.
How does a flat fee make small payments costly?
Not every interchange fee is a percentage. The US debit cap has a fixed part, 21 cents, plus 0.05%. On a small payment, the fixed part dominates.
Maximum for regulated issuers: 21 cents plus 0.05% of the payment, before the 1 cent fraud adjustment.
A $10 payment can carry interchange of 2.15%, while a $200 payment carries 0.16%. This is why small average sales are costly: a fee with a fixed element hits them hardest.
How do you see interchange on your statement?
Whether you can see interchange at all depends on your pricing model.
- Interchange plus (or interchange++). You will see lines for each card type with a rate and an amount. Interchange is its own section, and the provider's markup is shown separately.
- Blended. Interchange is hidden. You see a single rate for most cards and perhaps a higher one for others.
- Tiered. Interchange is bundled into "qualified", "mid-qualified" and "non-qualified" rates chosen by the provider.
- Flat rate. Interchange, scheme fees and markup are all inside one percentage.
To find interchange on an interchange plus statement, look for card type labels such as "consumer debit", "consumer credit" and "commercial card", with a percentage and sometimes a per-transaction amount next to each. Add them for the month to get your total interchange.
A quick sanity check
Divide the interchange total by the turnover for each card type. The result should match the published rate for that card type. If a figure is above the cap for that card type, ask your provider why. For help with this arithmetic, see working out a missing rate, turnover or fee.
What does interchange mean for your costs?
You cannot negotiate interchange. It is set by the schemes and regulators, and every provider pays the same. What you can negotiate is everything on top of it: the provider's markup, the per-transaction charges and the fixed fees.
That makes interchange a useful benchmark. If a provider's markup is the difference between the total rate and the interchange and scheme fees, you can see exactly how much of your bill is margin. A business paying 1.4% when interchange and scheme fees together are about 0.6% is paying about 0.8% in markup and other charges, and that is the part open to discussion.
If you are a consultant, this is a powerful way to frame a conversation. Show the merchant how much of their bill is pass-through cost nobody can change, and how much is the provider's own choice. The checkmyrates calculator splits every cost this way.
Frequently asked questions
What is an interchange fee?
It is a fee paid on every card payment by the merchant's provider to the bank that issued the customer's card. The provider passes it on to the merchant, either as a separate line or inside a blended rate.
Who sets interchange fees?
The card schemes, such as Visa and Mastercard, set interchange rate tables. In some regions, regulators cap the rates for certain card types, as the EU, UK, US, Australia and New Zealand do in different ways.
Can I negotiate interchange?
No. Every provider pays the same interchange for the same payment. What can be negotiated is the provider's markup and fixed fees on top.
Why is interchange higher for online payments?
Card-not-present payments carry a higher fraud risk than card-present payments, so issuers charge more for them.
Why are commercial cards more expensive?
Commercial and corporate cards often carry higher interchange because they offer features such as rewards, expense tools and higher limits. In many markets they are not capped the way consumer cards are.
How do I find interchange on my statement?
On an interchange plus statement it appears as separate lines by card type. On blended, tiered and flat-rate statements it is hidden inside a single rate, and you can only estimate it.
Sources and further reading
- UK interchange fees explained (MerchantHQ) (opens in a new tab)
- RBA conclusions on merchant card payment costs and surcharging (31 March 2026) (opens in a new tab)
- Regulation of debit interchange fees (Congressional Research Service) (opens in a new tab)
- Retail payment system: interchange fee regulation (NZ Commerce Commission) (opens in a new tab)
- Payment Systems Regulator (UK) (opens in a new tab)
- Federal Reserve, Regulation II (Debit Card Interchange Fees) (opens in a new tab)
- Reserve Bank of Australia, payments and infrastructure (opens in a new tab)
Figures in this guide are examples to show the method. Fees, rules and rates change, so check your own statement, contract and current rules before you decide. This is general information, not financial or legal advice.