Interchange Fee explained


Interchange Fee explained

Every merchant that accept credit card payments need to pay some processing-related rates and fees. However, in this article the main focus will be given to explain what is an interchange fee, as it represents the lion’s share of all card processing expenses.


Interchange fees also known as “wholesale” or “BASE” fees, are transaction fees that must be paid whenever a customer makes a purchase from the merchant’s store with their credit/debit card. They are paid by your acquiring bank to the customer’s card-issuing bank to cover handling costs including the risk involved for approving the transaction. Of course, your merchant account provider passes those fees in the end to you. The easiest way to explain interchange fees is, if you simply think of them as the main expenses of having a merchant account

Established by the major credit card networks, interchange fees typically range from 1-3 percent of every purchase. This means that an item sold for $100 nets you at $97 - $99, depending on your interchange rate. This is of course only if you’ve sold your item via credit/debit card.


Interchange fees are set by the most popular card networks for every industry individually and are not negotiable.

However, there are some factors that can affect your fnal rates on transaction:

  • If you are an e-commerce or MOTO merchant, you may end up paying a little higher interchange fee, as with card-not-present transactions, there is a bigger chance of fraud.
  • If you are a high-volume processing merchant, you can sometimes negotiate your fees down.
  • If you offer your customers reward cards, you may face higher fees, to help the card-issuing bank cover the frequent flyer miles and other costs.
  • Level 2 and level 3 credit card processing gets lower fees than level 1 credit card processing, as Level 2 and 3 card processing are designed for business to business transactions (B2B ) that typically have a higher transaction amount and also the risk of fraud with these kind of transactions is lower.


No matter who you choose for your payment processor, all interchange costs are the same, as they are determined by card networks. However, there are some additional processing fees that may determine your right merchant account provider.

So, if you’ve decided to start accepting credit card payments on your website, don’t hesitate and contact us today. We offer the lowest pricing programs on the market, with rates as low as 0,95%. But most importantly, these low rates come with a tremendous value. Our merchant account solution offers the highest level of security, PCI Compliant payment gateway access with all the latest features to make your credit card processing smooth and safe.

To find out more about credit card processing and our cost-effective pricing program, please schedule a free appointment with one of our dedicated merchant account expert today.


Apply today and let our experts find you the most suitable merchant account solution for your specific business for highly competitive pricing.