Solupay Blog

What Exactly are Interchange Fees, and Why Should I Care?

Posted by Joe Musitano on Mar 27, 2015 11:54:55 AM

Interchange is a fee that is assessed by the card networks, including Visa, MasterCard, Amex, Discover and the PIN Debit networks. Interchange is the largest component of a merchant’s processing costs - Interchange fees account for as much as 90% or more of the overall cost of accepting a credit card payment! They are also the most misunderstood aspect of card acceptance since it is a very complex topic.

Many merchants and cardholders continue to believe that Interest Charges cover the cost of issuing a credit card, but only a portion of cardholders carry a balance that is assessed interest charges. For example, most commercial cards, including purchasing cards, are paid in full each month. Interchange fees are the primary way that these “charge” cards earn revenue to cover the cost of carrying the card balance until the account is paid.

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Topics: Payment Gateway Solutions, Convenience Fees