Interchange
The per-transaction fee set by Visa and Mastercard, paid to the card-issuing bank. It is the largest and non-negotiable component of processing costs.
Interchange is paid by your acquiring bank to the bank that issued the card your customer used. Visa and Mastercard publish interchange tables annually with hundreds of rate categories depending on card type, transaction type, and merchant category code (MCC).
Common consumer credit card interchange rates for card-present transactions range from roughly 1.51% + $0.10 (basic Visa credit) to 2.30% + $0.10 (premium rewards cards). Debit cards with PIN entry can be as low as $0.21 + 0.05% under Durbin regulations. Card-not-present interchange runs approximately 0.4–0.6% higher than card-present.
Interchange is identical regardless of which processor you use. It flows through every processor at the same cost. On IC+ pricing, it is passed through at cost with no markup. On tiered or flat-rate pricing, it is bundled into blended rates where the processor's share is not visible.
Because interchange is non-negotiable, the focus in competitive bidding is always on the markup layer above it. Understanding interchange helps you verify that your processor is passing it through correctly on IC+ and not adding margin on top.
Interchange is your floor. You cannot go below it, but you should never pay more than it plus a competitive markup. IC+ pricing gives you full visibility into both numbers.
See how your effective rate compares to what competitive IC+ pricing would cost you.
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