Interchange Fee

Who pays interchange, and who receives it

Visa describes an interchange reimbursement fee as a default transfer price between acquirers and issuers in the Visa system. Merchants, that rule says, pay a merchant discount or service fee negotiated with their acquirer, which each acquirer sets independently. The RBA describes the same flow and names the rate-setter: interchange is typically set by the operators of payment networks such as Visa or Mastercard. A merchant’s counterparty is its merchant acquirer, not the issuing bank.

Source: Visa, “Visa Core Rules and Visa Product and Service Rules” (§1.8.1.2 “What is Interchange? – AP, Canada, CEMEA, LAC, US Regions”, edition 18 April 2026; a Visa rule, and in those regions only); Reserve Bank of Australia, “Merchant Card Payment Costs and Surcharging: Issues Paper” (Phase 1, October 2024; Australian settings and terminology as described at that date), accessed 2026-09-04.

What puts a transaction in one category rather than another

Visa is explicit: a transaction must meet the qualifications defined in the Visa Rules and the applicable rate qualification guide, and the acquirer must request the correct fee when submitting it into interchange. Under that rule, category assignment follows the data submitted at card payment clearing, not the checkout display.

Source: Visa, “Visa Core Rules and Visa Product and Service Rules” (§1.8.1.3 “Interchange Reimbursement Fee (IRF) Requirements”, edition 18 April 2026; a Visa rule), accessed 2026-09-04.

The RBA attributes the growth in category counts to developments including:

• new infrastructure, such as tokenisation;
• new products, such as instalments programs;
• competitive responses, such as special rates for small and medium businesses;
• splitting categories into card present and card not present.

It adds that this complexity makes it hard for merchants on unblended plans to check costs and compare providers, an assessment about Australia.

Source: Reserve Bank of Australia, “Merchant Card Payment Costs and Surcharging: Issues Paper” (Phase 1, October 2024; Australian settings and terminology as described at that date), accessed 2026-09-04.

Regulated ceilings are market-specific and mid-change

Source: Federal Reserve Board, “Average Debit Card Interchange Fee by Payment Card Network” (US debit fee standard and 2024 reported network averages); Federal Reserve Board, “Interchange Fee Standards: Small Issuer Exemption” (US small-issuer asset threshold); Federal Reserve Board, “Regulation II (Debit Card Interchange Fees and Routing)” (US debit rule scope and exemptions); Reserve Bank of Australia, “Merchant Card Payment Costs and Surcharging: Issues Paper” (Phase 1, October 2024; Australian settings and terminology as described at that date); Reserve Bank of Australia, “3. Interchange Fees”, Conclusions Paper (March 2026; the Payments System Board’s final Australian interchange decisions); Reserve Bank of Australia, “8. Impact and Implementation”, Conclusions Paper (March 2026; Table 10 implementation dates), accessed 2026-09-04.

Read the scope column before pricing against these figures. The Australian rows are mid-change: the RBA’s Review of Merchant Card Payment Costs and Surcharging closed with a Conclusions Paper in March 2026, whose Table 10 sets 1 October 2026 for the domestic-card changes and 1 April 2027 for the foreign-card cap.

Source: Reserve Bank of Australia, “About Review of Retail Payments Regulation” (phases of the Review of Merchant Card Payment Costs and Surcharging and their publication dates); Reserve Bank of Australia, “3. Interchange Fees”, Conclusions Paper (March 2026; the Payments System Board’s final Australian interchange decisions); Reserve Bank of Australia, “8. Impact and Implementation”, Conclusions Paper (March 2026; Table 10 implementation dates), accessed 2026-09-04.

The same card brand can carry very different interchange

For 2024, the Federal Reserve Board reports that across all networks, exempt transactions averaged $0.51 each, or 1.21 per cent of average transaction value, while covered transactions averaged $0.23, or 0.47 per cent; all transactions averaged $0.34, or 0.73 per cent. The Board cautions that each figure is a network average and does not reflect what a particular issuer will earn.

Source: Federal Reserve Board, “Average Debit Card Interchange Fee by Payment Card Network” (US debit fee standard and 2024 reported network averages), accessed 2026-09-04.

Issuer mix moves the same lever. The RBA estimates that foreign-issued cards accounted for around 8 per cent of interchange fees paid by merchants in Australia while making up around 3 per cent of transactions. A shift in cross-border payment volume can therefore change blended card cost by itself, apart from any foreign exchange spread.

Source: Reserve Bank of Australia, “Merchant Card Payment Costs and Surcharging: Issues Paper” (Phase 1, October 2024; Australian settings and terminology as described at that date), accessed 2026-09-04.

What your acquirer has to tell you, and where that stops

In the Europe Region, Visa requires an acquirer to inform its merchant of the availability of interchange reimbursement fee rates, including for intra-EEA and domestic EEA transactions. Such agreements must also notify the merchant that merchant service charge pricing on a “MIF Plus Plus” basis is available for transactions completed with a consumer credit or consumer debit card, specify the charge, interchange fees and scheme fees for each Visa product category unless the merchant asks in writing for another format, and not blend merchant service charges across schemes unless the merchant requests it. Those are Visa Europe Region obligations, and the MIF Plus Plus notification does not reach commercial cards. Elsewhere, write the itemisation you want into the contract and check it against your merchant discount rate.

Source: Visa, “Visa Core Rules and Visa Product and Service Rules” (§5.2.1.8 “Communication of Interchange Reimbursement Fee (IRF) Rates – Europe Region”, edition 18 April 2026; a Visa Europe Region rule); Visa, “Visa Core Rules and Visa Product and Service Rules” (§5.2.1.6 “Additional Merchant Agreement Requirements”, Table 5-1, Europe Region row, edition 18 April 2026; a Visa Europe Region rule), accessed 2026-09-04.

Interchange corrections run between members

Visa reserves the right to rectify improper interchange allocations, but that process runs between issuers and acquirers. Adjustments are limited to transactions within 90 calendar days of the processing date of the oldest one submitted or identified; up to two years where Visa determines extenuating circumstances applied; and are made only when the total exceeds USD 2,500, with individual correcting transactions above USD 50. A merchant is not a party to it; billing queries go to the acquirer.

Source: Visa, “Visa Core Rules and Visa Product and Service Rules” (§1.8.2.1 “Interchange Reimbursement Fee (IRF) Adjustments”, edition 18 April 2026; a Visa rule), accessed 2026-09-04.

Continue with merchant discount rate for the merchant-facing price and settlement for how amounts reach the account.