Interchange fee

The interchange fee is a non-negotiable fee set by card brands for the use of their networks. Payment processors like Payroc use the card brand’s networks to process credit transactions and debit transactions. The card brand assigns the transaction a target interchange category for each credit transaction and debit transaction. The rate of the interchange fee depends on which interchange category the card brand assigns to the transaction. The interchange fee is composed of:
  • Set percentage (Basis Points): Fee of 1 hundredth of 1 percentage point, for the dollar-value of each individual transaction.
  • Set transaction fee: Fee to pay for the cost of processing each individual transaction.

Target interchange category

Factors that influence what interchange category the card brand assigns to a transaction include:
  • Card brand
  • Card type
  • Length of time to batch
  • Method of transaction
  • Mismatched authorization amount and settlement amount
  • Missing or incomplete validation code
  • SIC (Standard Industry Classification) for merchant type
  • Size of transaction