Interchange fees explained - and why yours are probably not the problem

"3.2% plus 25 cents."

That is a card fee from your side of the counter: one number, one per-transaction charge. You have been told most of it is interchange, because interchange is the part you have heard of. In Europe it is the smallest line on the page.

What interchange is

Interchange is a fee paid by the acquirer, the bank or institution on the merchant's side, to the issuer, the bank that gave the customer the card. It moves on every card transaction and it compensates the issuer for the card, the credit risk and the fraud risk.

The card schemes, Visa and Mastercard, set the rates. Neither the acquirer nor the merchant negotiates them. The acquirer pays interchange to the issuer and recovers it from the merchant as part of the card fee, which is why it ends up on your invoice even though you never dealt with the issuer.

Three parties, one direction of travel: merchant pays acquirer, acquirer pays issuer, scheme sets the price and takes its own fee on the way through.

What it costs

In the EEA, consumer card interchange is capped by regulation: 0.2% on debit and 0.3% on credit, for domestic and intra-EEA transactions. Those caps have applied since 2015 and they are why Europe is one of the cheapest places in the world to accept a card.

Cards issued outside the EEA and used at an EEA merchant fall under the interregional caps the schemes committed to in 2019: 0.2% and 0.3% when the card is present, 1.15% debit and 1.5% credit when it is not. Since the UK left the EU, a UK card at an EEA merchant, or the reverse, sits in that interregional band rather than the domestic one.

Commercial cards are outside the caps altogether and cost more.

In the US there is no general cap. Credit interchange typically runs from around 1.5% to over 3%, depending on the card, the channel and the category. Debit from large banks is regulated under Durbin at a flat cents-plus-basis-points rate; debit from smaller banks is not.

The schemes publish their tables and update them twice a year. Read the table for your region rather than a summary, including this one.

What moves it

Interchange is a matrix. The cell you land in depends on:

• Card type. Debit below credit. Prepaid below debit. Premium and rewards cards above all of them, because someone pays for the points.
• Consumer or commercial. Commercial cards carry higher interchange and sit outside the EEA caps.
• Card present or not. Online is more expensive than in person, because the issuer cannot see the card and takes more fraud risk.
• Where the card was issued. Domestic is cheapest. Intra-region next. Interregional most expensive.
• Merchant category code. In some regions certain categories get preferential rates. In the EEA, with consumer cards capped, the category barely moves interchange at all.

That last point is the one that matters if a bank has called you hard to serve. If you run a crypto exchange, an iGaming operator or a forex broker in Europe, your interchange on a consumer debit card is the same 0.2% as the supermarket's. The expensive part of your card fee sits somewhere else.

Where the rest of the number goes

A card fee has three components:

1. Interchange, paid through to the issuer. Set by the scheme. Not negotiable.
2. Scheme fees, paid to Visa or Mastercard for running the network. Set by the scheme. Not negotiable, though they vary by transaction type and region and they add up.
3. Acquirer markup, the acquirer's own price for the risk it takes and the service it provides. This is the only line anyone negotiates, and it is the line that grows when a bank considers you hard to serve.

So when a European high-risk merchant is quoted 3.2% on a consumer debit card, about 0.2 of that is interchange, a fraction of a percent is scheme fees, and the rest is the acquirer's view of you.

Then the lines that never made it into the rate. The scheme registration fee for a high-risk category, charged annually. The rolling reserve, held for months. The chargeback fee per dispute. The settlement delay, which you carry as working capital rather than as a number on the invoice. Then you count the monthly minimum. Then you count the setup fee. Then you count what the FX fill takes on the way to your account.

Nobody hid those from you. They were on page four of the term sheet, and the rate was on page one.

Interchange++ or blended

There are two ways an acquirer can price you.

Blended gives you one rate for everything. It is easy to compare on a slide and impossible to audit. The acquirer estimates your average interchange, adds scheme fees and markup, and gives you a number. If your customers pay with cheaper cards than the estimate assumed, the acquirer keeps the difference.

Interchange++ passes interchange and scheme fees through at cost and shows the markup as its own line. You pay the interchange the issuer charged on each transaction, and the markup is a number you can see and argue about.

If the market calls you high-risk, your markup is the whole conversation. A blended rate folds it into a single figure; interchange++ puts it on the table where you can see it. It's why Crosswire's acquiring bands are quoted interchange++, and why the calculator shows the percentage and the per-transaction minimum together rather than one without the other.

Can you reduce it

Interchange itself, a little. Encourage debit. Acquire locally so more transactions read as domestic. Take payments in person where the business allows. Send the data the schemes reward, such as enhanced transaction data for commercial cards. None of this changes the tables; it changes which cell you land in.

The larger lever is the markup, and the terms around it. You reduce those by seeing them, which means pricing on interchange++ and reading the whole term sheet rather than the headline. Illustrative, but the shape holds: 10 basis points of markup on EUR 5 million a month is EUR 5,000 a month. A rolling reserve released two months earlier is worth more than that.

The regulation, briefly

The EU Interchange Fee Regulation of 2015 capped consumer card interchange across the EEA and required acquirers to show interchange, scheme fees and markup separately on request. It is the reason an acquirer in Europe can offer interchange++ honestly: the law defines the components.

In the US, the Durbin Amendment of 2010 capped debit interchange for banks above USD 10 billion in assets and required debit cards to carry more than one network. Credit interchange in the US remains uncapped and is set by the schemes.

What to do with this

Get your current rate card and read it as three lines. If your acquirer won't tell you what the three lines are, that is your answer.

Paste it into Beat My Stack and see which lines were benchmarked, which were stated, and which are missing: crosswirepay.com/beat-my-stack

Or run your own volumes rail by rail: crosswirepay.com/pricing

If I have a cell in the matrix wrong for your market, tell me. The tables move twice a year and I would rather correct it than defend it.

Rates quoted are the published regulatory caps and scheme commitments as of September 2026. They are illustrative of the structure, not a quote; run your own numbers.