Commerce Glossary
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What is Credit Card Interchange?
cred - it card in - ter - change
noun
The process in which an acquirer or acquiring bank submits approved card transactions on behalf of its merchants.
How Does Credit Card Interchange Work?
Interchange refers to the clearing and settlement of records between payment system participants. The term can also be used to describe the fees or transfer pricing between issuers and acquirers. Participating acquirers and issuers pay or receive interchange each time a credit or debit card is used. For example, banks pay interchange for the fees associated with card-based transactions. This fee tends to be paid by the acquiring bank, or the merchant's bank, to the consumer's banks, or the issuing bank.
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