Definition
Interchange fee
The interchange fee is the portion of every card transaction that the networks pass to the cardholder's bank, and it is the largest, non-negotiable part of processing cost.
The interchange fee is the biggest slice of what it costs you to accept a card, and the one nobody can negotiate away. Set by the card networks (Visa, Mastercard) and paid to the bank that issued the guest's card, it is baked into every transaction before your Payment processor adds its own markup on top. Interchange is why accepting cards is never free, no matter which processor you use.
What makes it tricky is that interchange is not one number. It varies by card type: a basic debit card is cheap, while a premium travel-rewards credit card costs much more, and card-not-present transactions (online and phone orders) run higher than an in-person chip tap. So your blended rate drifts with the mix of cards your guests happen to carry, not with anything you did.
The operator's move is transparency, not heroics. Ask your processor for interchange-plus pricing, where interchange is passed through at cost and the processor's markup is shown as a separate line, so you can see exactly what is the networks' fee and what is your provider's margin. You cannot lower interchange, but you can stop overpaying the markup stacked on it.
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