Site Navigation

What is a credit card interchange?

cred - it card in - ter - change
noun

The process in which an acquiring bank submits approved credit card transactions on behalf of its affiliated merchants is known as credit card interchange.

How does credit card interchange function?

Credit card interchange consists of the procedures of reconciling and settling transaction records among participants within a payment system. Additionally, it can refer to the fees or pricing transfers occurring between card issuers and acquiring banks. Every time a credit or debit card is used, participating acquiring banks and card issuers either pay or receive interchange fees. For instance, when it comes to card-based transactions, banks pay interchange fees, typically remitted by the acquiring bank (the merchant's bank) to the issuing bank (the consumer's bank).