Interchange Definition.
The fee the acquirer pays the issuer on every card transaction, meant to pay for the payment guarantee and the risk the issuer carries on the cardholder side. The Interchange Fee Regulation caps it in the EEA at 0.2% for consumer debit cards and 0.3% for consumer credit cards. It is the largest component of the merchant service charge (MSC), ahead of scheme fees.
See also
Where this term appears
GuideThe four-party modelGuideThe role of banksGuideMerchant, acquirer, PSPGuidePayment schemesGuidePayment regulationGuidePayments in GermanyGuidePayments in AustriaGuidePayments in the BalkansGuidePayments in the Baltics and FinlandGuideThe PSD2 framework contract and conduct-of-business rulesGuidePayments in Germany, Austria, and SwitzerlandGuidePayments in Central and Eastern Europe