What is “interchange” and how does it work?
Interchange is the fees associated with exchange of transaction data between Acquiring and Issuing institutions in accordance with the Visa and MasterCard bylaws and rules. It is the fee that Visa and MasterCard charge to clear your transaction to the cardholder bank. The interchange fee is actually paid to the bank that issued the card while the merchant’s bank is charged the interchange fee. Merchant transactions are gathered for processing every night, these transactions are routed to the cardholders to be charged and merchants are credited accordingly.
