Payments
Interchange fee
An interchange fee is the amount paid to the cardholder's issuing bank on each card transaction, set by the card networks. Interchange is the largest component of card processing costs and varies by card type, with rewards and corporate cards carrying higher rates.
In plain terms: The part of your card fee that goes to the customer's bank, not your processor.
Why it matters
Explains why blended processing rates drift upward as a customer base changes: a rise in premium rewards cards or international cards raises interchange without your processor changing anything.
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