Interchange fee: what it is and who sets it

What is an interchange fee?

It is a fee paid to the card issuer, the bank whose name is on the cardholder's card, for each card payment. The federal statute on debit cards defines an interchange transaction fee as "any fee established, charged or received by a payment card network for the purpose of compensating an issuer for its involvement in an electronic debit transaction." Credit cards work the same way, under each network's own rules.

Visa describes interchange reimbursement fees as "transfer fees between financial institutions." It also says merchants do not pay them directly. Merchants pay a "merchant discount" to their own financial institution, and interchange is built into that.

Who sets interchange rates?

The card network. Visa publishes its US rates in a document called Visa USA Interchange Reimbursement Fees. The current edition shows rates effective April 18, 2026. The rate on a given payment depends on several things:

• The card: debit or credit, and for credit, the product (for example Visa Signature Preferred or a basic card).
• How it was used: card present or card not present.
• The merchant's category and the payment: Visa lists separate programs for retail, education, healthcare, recurring payments and others, some only above a set amount.

How much is interchange on debit vs credit?

Debit and credit are priced very differently. For a large issuer, debit interchange is capped by federal rule. Credit card interchange is not.

Example rates from Visa's schedule effective April 18, 2026, applied to one $1,108.33 card-not-present payment:

These are examples of interchange only. They don't include network fees or the processor's charge. Which program applies to a real payment depends on how it qualifies under Visa's rules.

Why is regulated debit so much cheaper?

Federal law. Regulation II, which implements the Durbin Amendment, limits the interchange a debit issuer may receive to 21 cents plus 5 basis points (0.05%) of the payment. An issuer that meets the Federal Reserve's fraud-prevention standards may receive up to 1 cent more. Issuers that, with their affiliates, have less than $10 billion in assets are exempt. That is why Visa's schedule has an "exempt" debit column with higher rates.

In October 2023 the Federal Reserve proposed lowering the cap to 14.4 cents plus 0.04%, with a 1.3-cent fraud adjustment. As of the eCFR text for October 1, 2026, the cap in force is still 21 cents plus 0.05%.

Can a business lower its interchange?

Not by negotiating with the network. A business can affect which program a payment qualifies for, and it can steer customers toward cheaper methods such as bank transfer. Under interchange-plus pricing the interchange on each payment is passed through, so cheaper cards cost less. Under flat-rate pricing the business pays the same rate whatever the card.