Updated April 2026
Interchange
The fee paid by the merchant's bank to the cardholder's bank for processing a card transaction; the primary reason merchants charge different prices for card types.
Interchange is a fee that the merchant's bank (acquiring bank) pays to the cardholder's bank (issuing bank) every time a card transaction is processed. The fee is set by the card network (Visa, Mastercard, American Express, Discover) and varies by card type, merchant category, transaction method, and other factors.
Visa and Mastercard publish their interchange schedules annually. As of April 2026, typical US interchange rates are:
- Consumer credit cards: 1.5%–2.5% of the transaction amount, plus $0.10 - Consumer signature debit (regulated): capped at $0.21 + 0.05% per transaction under the Durbin Amendment (12 CFR 235.3), for issuers with assets over $10 billion - Consumer signature debit (unregulated, small banks and credit unions): varies, typically 0.7%–1.5% - Consumer PIN debit (regulated): lower than signature debit; varies by network
The Durbin Amendment (Dodd-Frank Act § 1075, 12 U.S.C. 1693o-2) capped debit interchange for regulated issuers in 2011. This is why large-bank debit cards are cheaper for merchants to accept than credit cards.
From the consumer's perspective, interchange explains why some merchants surcharge credit cards (though this is prohibited in some states), offer cash discounts, or only accept debit. The merchant bears the cost; it does not appear as a fee on the consumer's statement. But it influences pricing: businesses price goods and services to cover their average payment-processing costs.
Interchange also explains the rewards economics of credit cards. High-interchange premium cards (Amex Platinum, Chase Sapphire Reserve) generate more interchange revenue per transaction, which funds higher reward rates. Debit card rewards are rare because the Durbin cap limits interchange revenue.
Credit vs Debit: how Interchange differs
Credit card interchange is set by the market (Visa/Mastercard schedules, up to 2.5%+ for premium cards) and funds credit card rewards. Debit interchange for large banks is capped by the Durbin Amendment at $0.21 + 0.05%, making debit cheaper for merchants. This is why debit cards rarely offer meaningful rewards: the revenue base is too small. Consumers who prefer credit for rewards are, in effect, cross-subsidised by interchange paid by merchants who accept credit cards.
Related guides
Related glossary terms
Signature Debit vs PIN Debit
Two routing paths for debit card transactions: signature debit goes through Visa/MC network (higher merchant fee, more protections); PIN debit goes through regional networks (lower fee, different protections).
Durbin Amendment
Section 1075 of the Dodd-Frank Act (2010) that capped debit interchange at $0.21 + 0.05% per transaction for large bank issuers and required multi-network routing on debit cards.
MCC (Merchant Category Code)
A four-digit code assigned by card networks to every merchant that classifies the type of business, affecting interchange rates, rewards earning, and sometimes card acceptance restrictions.
Verified April 2026 against eCFR.gov and CFPB regulation pages. Not legal advice. Return to glossary →