Short answer
The fee the cardholder's bank (the issuer) charges on every card payment, set by Visa and Mastercard and paid through your processor.
Interchange is the largest part of what it costs to accept a card. It goes to the bank that issued the card, not to your processor, and it varies by card type (debit, standard credit, rewards credit, business cards), by how the card is used (online or in person) and by the data sent with the payment. Regulated debit cards from large US banks carry the lowest rates; premium rewards and business cards carry the highest.
On flat-rate pricing such as Stripe’s standard 2.9% + 30¢, interchange is hidden inside one blended price. On interchange-plus pricing you pay the actual interchange on each transaction, plus a fixed markup, so you can see it line by line.
Part of our guide to interchange-plus pricing explained.
Related terms
- Interchange-plus pricing: A pricing model where you pay the actual interchange and network fees on each payment, plus a fixed processor markup.
- Card network fees: Fees charged by Visa, Mastercard and the other card networks for using their networks, separate from interchange.
- Effective rate: Your total processing fees divided by your total card volume for the same period: the one number that makes any two pricing setups comparable.