Interchange fees , sometimes known as swipe fees, are the costs merchants pay financial institutions and credit card companies to be able to accept and process credit and debit card payments. They are paid to customers card issuing banks (Chase, Bank of America, etc.) to cover the handling costs and risks associated with approving the card transaction.
These fees are one component of the cost of credit card processing , along with assessments (fees paid to card associations such as Visa and Mastercard) and markups (fees paid to third parties such as payment processors and merchant accountsSquare, First Data/Fiserv, etc.). Interchange fees are typically the highest of the three and non-negotiable.
Merchants are encouraged to know these fees to understand the cost involved in accepting different card brands and manage their expenses.
Current Interchange Fees & Rates
Click through the tabs below for a breakdown of common interchange fees for each card association.
The rates listed are for the US only. Other fees vary by country, with some countries having government-mandated caps.
- Visa
- Mastercard
- Discover
- American Express
Below is a sample of current Visa interchange fees . Note that these are just a few of the common ratesbusiness, reward, and international credit cards will all have higher fees. High-volume businesses, like B2B companies or businesses processing billions of dollars in transactions, can also qualify for different processing tiers, which offer lower rates.
In the News:
Interchange rates for small merchants processing gross visa credit sales of up to $250,000 per year are assessed a 10% cut on transaction fees in Visas new interchange fees for 2022.
Sample of 2022 Visa Interchange Fees
| Fee Program | Visa Signature Preferred/ Visa Infinite | Visa Signature/ Visa Infinite | Traditional Rewards | All Other Products |
|---|---|---|---|---|
| Small Merchant Product 1 | 2.18% + 10 cents | 1.73% + 10 cents | 1.73% + 10 cents | 1.58% + 10 cents |
| Product 1 | 2.50% + 10 cents | 2.05% + 10 cents | 2.04% + 10 cents | 1.89% + 10 cents |
| Product 1 Tokenized | 2.40% + 10 cents | 1.95% + 10 cents | 1.95% + 10 cents | 1.80% + 10 cents |
| Small Merchant Product 2 | 1.88% + 10 cents | 1.43% + 10 cents | 1.43% + 10 cents | 1.29% + 10 cents |
| Product 2 | 2.10% + 10 cents | 1.65% + 10 cents | 1.65% + 10 cents | 1.51% + 10 cents |
| Small Ticket | 2.20% (min. 4 cents) | 2.20% (min. 4 cents) | 1.90% (min. 4 cents) | 1.90% (min. 4 cents) |
Note: Fees apply to both card-present and card-not-present transactions.
B2B Visa Payments
Interchange fees for B2B payments are anywhere from 1.9% + 10 cents3.15% + 20 cents for credit and 0.5% + 21 cents2.95% + 10 cents for debit.
Mastercard interchange rates change semiannually. Like the Visa interchange rates, Mastercards fees will vary depending on the consumers credit card, the transaction type, the type of business you have, and how large your business is. Below is just a sample of common rates.
In the news: Mastercards standard interchange rate (applied when the transaction does not match any of the basic qualifications) has increased by 0.20% (from 2.95% + 10 cents to 3.15% + 10 cents) per transaction.
Sample of 2022 Mastercard Interchange Fees
| Program Name | Core (USD) | Enhanced Value (USD) | World (USD) |
|---|---|---|---|
| Standard Credit | 3.15% + 10 cents | 3.15% + 10 cents | 3.15% + 10 cents |
| Small Ticket Credit Card-present | 1.65% + 2 cents | 1.80% + 2 cents | 1.90% + 2 cents |
| Small Ticket Credit Card-not-Present | 1.95% + 2 cents | 2.10% + 2 cents | 2.20% + 2 cents |
Mastercard B2B Interchange Rates
- Small business credit: There are five levels of rates. The lowest fee comes in at a flat $1.50 for utilities, and the highest rate is 3.3% + 10 cents for Standard fees Level 5.
- Unregulated commercial debit/prepaid and large market credit: Commercial debit and prepaid, as well as Large Market Credit, have rates anywhere from 0% for rebates to 2.95% + 10 cents for standard fees.
- Commercial payments account and variable interchange programs: Commercial payment rates are based on the total transaction amounts. Expect to pay anywhere from 0.70% for large ticket sales of more than $1 million per year to commercial rates for transactions of less than $10,000 annually.
- VIP rates range from 0.8% + 10 cents to 2.85%.
Unlike Visa and Mastercard, Discover issues its cards directly to consumers and merchants, which means the interchange fees they receive are not divided with other card networks. Discovers rates also depend on a number of factors, such as the consumers card type, transaction type, business category, and processing volume. Below is a sample of Discovers debit card interchange rates .
In the news:
Discover now offers special interchange rates for nonprofits which ranges from 0.05% + 21 cents to 2.3% + 10 cents.
Sample 2022 Discover Credit Card Interchange Fees
| Card Type | Interchange Fees |
|---|---|
| Basic Credit, Card-present | 1.56% + 10 cents |
| Rewards Credit, Card-present | 1.71% + 10 cents |
| Premium Credit, Card-present | 1.71% + 10 cents |
| Commercial Credit, Card-present | 2.30% + 10 cents |
| Basic Credit, Card-not-Present | 1.87% + 10 cents |
| Rewards Credit, Card-not-Present | 1.97% + 10 cents |
| Premium Credit, Card-not-Present | 2% + 10 cents |
| Commercial Credit, Card-not-Present | 2.30% + 10 cents |
Like Discover, American Express also issues its credit cards directly to consumers and merchants. It also operates under a closed network policy which gives them more control over its fee structure. American Express rates are based on the industry and transaction amounts.
In the news:
American Express recently launched a debit card program for small businesses called OptBlue, which carries debit card transaction fees ranging from 0.99% + 15 cents to 1.99% + 10 cents per transaction.
Sample 2022 American Express OptBlue Interchange Fees
| Transaction Type | Interchange Fees |
|---|---|
| AmEx Retail, Consumer Debit | 0.99% + 15 cents |
| AmEx Restaurants, Consumer Debit | 1.29% + 10 cents |
| AmEx B2B Wholesale, Consumer Debit | 0.99% + 15 cents |
| AmEx Retail, Small Business Debit | 1.94% + 10 cents |
| AmEx Restaurants, Small Business Debit | 1.99% + 10 cents |
| AmEx B2B Wholesale, Small Business Debit | 1.94% + 10 cents |
How Do You Calculate Interchange Fees?
The credit card interchange rates and fees are set by the card associations (Visa, Mastercard, American Express, Discover, etc.), but they are not very straightforward. In fact, there are more than 300 different interchange rates out there. The particular interchange fee you pay depends on the card your customer pays with and the type of transaction you are processing.
Merchants generally dont need to worry about calculating interchange fees as they are built in to the rates you pay to your payment processor. You will often see interchange fees applied as a flat fee plus a percentage: 2.6% + 10 cents, for example. Or, the processor will pass along the direct interchange fee with its markup.
Factors That Influence Interchange Fees
A few factors impact what you pay for interchange ratesthe biggest, generally, is how you receive and process the credit card payment.
For most storefronts, the customer likely has the card in their possession and enters it into a payment terminal. This is a card-present (CP) transaction. But sometimes, the card isnt physically availableyou might enter the card manually or take payment over the phone, for instance. These, and all online transactions, are card-not-present (CNP) transactions. CNP transactions are inherently riskier, so they incur higher fees.
Rates may also fluctuate depending on how much information has been entered. To lower your rates, you want to provide as much information as possible to show that the transaction is legitimate and mitigate fraud risk . Use Address Verification Service (AVS) and include the authorization ID and order number when you settle the transaction. Its also recommended to settle transactions within three days of the sale.
Other factors include:
- Merchant Category Code (MCC): Your MCC is based on the type of business you run. (Retail, supermarket, fuel, and travel businesses each have different interchange rates.)
- Type of card: There are different types of credit cards out there. Cards that offer lots of awards and benefits typically come with higher interchange fees.
- Card owner: Consumer, business, government, and nonprofit credit cards also come with their own interchange fees.
- Card association: Credit card associations set their own interchange rates, so theres variability, which well cover further down.
Interchange Fees: Frequently Asked Questions (FAQ)
How are businesses charged interchange fees?
Every time a merchant processes a credit card transactionswipe, chip, or keyed-inthat merchant collects the money paid for their products or services. However, they also pay third parties some of that money (markup, interchange, and assessment fees).
Typically, the payment processing systems are connected to the merchants bank (the merchant account ), so the money is automatically withdrawn. You dont have to pay interchange fees like you would a utility bill or standard invoice.
Each of the different card associations (Visa, Mastercard, Discover, and American Express) all have different interchange rates. Within each card association, there are hundreds of different possible rates for different consumer and business credit and debit cards, transaction types (card-present, keyed, and online), business types (retail, government, travel, etc.), and business sizes (businesses processing over $750 million can typically qualify for lower rates).
Learn more about how credit card processing works and the different types of processing fees .
Can interchange fees be negotiated?
Strictly speaking, interchange fees are non-negotiable. However, if you process business credit cards (one business selling to another), the amount of data required for the transaction is significant in determining the interchange rate. These are known as Level 2 or Level 3 transactions.
The more data provided, the more secure the transaction is assumed to beand the lower the rate becomes. Its important to remember that while a business transaction may qualify for a Level 2 or 3 rate, it will be charged as Level 1 (generally associated with consumer purchases) if you do not provide the required information.
See if you qualify for Level 2 or Level 3, or B2B payment processing one of the only ways for small businesses to lower interchange fees.
Can you avoid interchange fees?
You may have heard of free credit card processing, but these methods do not truly eliminate your card processing fees, especially interchange fees. Free credit card processing, or zero-cost processing, essentially allows businesses to pass along their card processing cost to consumers. However, not all states consider these methods legal, and some consumers may avoid businesses that implement them.
Find out if free credit card processing is right for your business in this guide.
Bottom Line
Interchange rates might be pesky, but theyre necessary. And while mostly out of your control, understanding what interchange fees are will help you to find the most affordable overall rates and keep more for your profit. To calculate what processor will provide the lowest rates for your business, check out our guide on the cheapest credit card processing companies . Or you can learn how to accept credit card payments if youre just starting out.
What are the current interchange rates
The typical interchange rate is 1.7% – 2% for credit cards and 0.5% for debit cards.
Average Interchange Rates
- Visa: 1.4% – 2.5%
- Mastercard: 1.5% – 2.6%
- Discover: 1.55% – 2.5%
- American Express: 2.3% – 3.5%
How much is Visa interchange rate
Business credit cards may have higher fees than consumer rewards credit cards. For example, Visa Business credit card has an interchange fee of 2.200 % + 10¢ while the Visa Rewards Traditional credit card has a fee of 1.650 % + 10¢.
How often do interchange rates change
Interchange rates change twice a year – in April and October. Payment processing companies make money by putting a markup on top of the interchange rate. This is called cost-plus or interchange-plus pricing. “Interchange” is the card company rate and the “plus” is the markup by the payment processor.
How much is Mastercard interchange
Average credit card interchange fees
| Payment network | Interchange fee range |
|---|---|
| Visa | 1.15% + $0.05 to 3.15% + $0.10 |
| Mastercard | 1.25% + $0.05 to 3.15% + $0.10 |
| Discover | 1.45% + $0.05 to 3.05% + $0.10 |
| American Express | 1.35% + $0.10 to 3% + $0.10 |