Interchange is part of the cost you pay to run credit cards at your company. The rate is determined by the card brands, Visa, MasterCard, Discover and American Express. An interchange charge is a fee that goes to the bank that issued your customer’s credit card (like Citi, Chase or Capital One) every time your business accepts a payment. Importantly, it’s a fee that lands with the merchant to pay, not the customer.
Interchange rates vary from purchase to purchase because the card issuer must make an assessment about the risk of fraud each purchase carries. This assessment can depend on a huge number of variables, including your business model, the type of transaction, and the amount of data included in the payment details.