Interchange fees are the part of every card sale paid to the bank that issued the customer's card. Visa and Mastercard set them, and they're usually the biggest part of your processing cost. Rates vary by card type, how the card is taken and your business category: debit cards are cheapest, while rewards, business and keyed-in or online cards cost the most. You can't negotiate them, but you can control what drives them.
Key takeaways
- Interchange goes to the customer's card-issuing bank, not your processor.
- Visa and Mastercard set the rates and update them about twice a year.
- Debit is cheapest; rewards, business and card-not-present sales cost more.
- You can't negotiate interchange, but you can qualify for lower categories.
- Your processor's markup on top of interchange is the part you can negotiate.
Where interchange fits in every card fee
| Piece | Who gets it | Can you change it? |
|---|---|---|
| Interchange | The customer's card-issuing bank | Indirectly, by qualifying for lower categories |
| Network (assessment) fees | Visa, Mastercard, Discover, Amex | No |
| Processor markup | Your processor | Yes, negotiate it or switch |
See how all three add up in what normal credit card processing fees look like.
What makes interchange higher or lower
- Card type: debit cards from large banks have capped interchange. Standard credit cards cost more, and premium rewards and business cards cost the most.
- How the card is taken: tapped or dipped in person is cheapest. Keyed-in and online payments carry more fraud risk and cost more.
- Your business category: some industries have their own rate programs.
- Data sent with the sale: complete data, such as address verification online and Level 3 data on business cards, can qualify for lower rates.
- Settling on time: batching your transactions daily avoids downgrades to higher rates.
How to pay less, even though interchange is fixed
- Take cards in person when you can, instead of keying them in.
- Send complete data on online and invoice payments.
- Use Level 3 processing if customers pay with business or corporate cards.
- Get interchange-plus pricing, so you pay interchange at cost plus a fixed, visible markup.
- Use dual pricing or surcharging where allowed, so customers paying by credit card cover the cost.
What's changing in 2026
A proposed Visa and Mastercard settlement received preliminary court approval in June 2026. It would reduce average credit card interchange by about a tenth of a percentage point for five years, cap rates on standard consumer cards, and give merchants clearer rights to surcharge or decline some premium cards. It isn't final, so current rates still apply.
See where your total lands with the credit card processing fee calculator.
Frequently asked questions
What is an interchange fee?
Who sets interchange rates?
Why do interchange rates vary?
Can I negotiate interchange fees?
Are debit cards cheaper than credit cards?
Will the Visa and Mastercard settlement lower interchange?
This article is general information, not legal, tax or financial advice. Card network rules and state laws change; confirm the rules for your business before changing how you charge customers.