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Acronyms that contain the term interchange fee 

What does interchange fee mean? This page is about the various possible meanings of the acronym, abbreviation, shorthand or slang term: interchange fee.

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EDI

Electronic Data Interchange

Computing » Networking

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EDI

Electronic Data Interchange

Academic & Science » Ocean Science

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EDI

Electronic Data Interchange

Computing » Telecom

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EDI

Electronic Data Interchange

Governmental » Transportation

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EDI

Electronic Data Interchange

Governmental » Military

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EDI

Electronic Data Interchange

Computing » General Computing

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EDI

Electronic Data Interchange

Business » Accounting

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EDI

Electronic Data Interchange

Academic & Science » Electronics

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GIF

Graphics Interchange Format

Computing » General Computing

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GIF

Graphics Interchange Format

Governmental » Military

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ASCII

American Standard Code For Information Interchange

Computing » General Computing

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ASCII

American Standard Code For Information Interchange

Computing » Networking

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ASCII

American Standard Code for Information Interchange

Computing » Cyber & Security

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DI

Data Interchange

Governmental » Military

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XMI

XML Metadata Interchange

Internet

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XMI

Xml Metadata Interchange

Computing » Software

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EDIFACT

Electronic Data Interchange for Administration, Commerce, and Transport

Computing » General Computing

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EDI

Electronic Data Interchange

Computing » Software

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KIF

Knowledge Interchange Format

Computing » Networking

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AIFF

Audio Interchange File Format

Computing » General Computing

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DIF

Data Interchange Format

Business » Accounting

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DIF

Data Interchange Format

Computing » Networking

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WEDI

Workgroup For Electronic Data Interchange

Computing » General Computing

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IFF

Interchange File Format

Computing » General Computing

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DISA

Data Interchange Standards Association

Computing » Software

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What does interchange fee mean?

Interchange fee
Interchange fee is a term used in the payment card industry to describe a fee paid between banks for the acceptance of card-based transactions. Usually for sales/services transactions it is a fee that a merchant's bank (the "acquiring bank") pays a customer's bank (the "issuing bank"); and for cash transactions the interchange fee is paid from the issuer to acquirer, often called reverse interchange. In a credit card or debit card transaction, the card-issuing bank in a payment transaction deducts the interchange fee from the amount it pays the acquiring bank that handles a credit or debit card transaction for a merchant. The acquiring bank then pays the merchant the amount of the transaction minus both the interchange fee and an additional, usually smaller, fee for the acquiring bank or independent sales organization (ISO), which is often referred to as a discount rate, an add-on rate, or passthru. For cash withdrawal transactions at ATMs, however, the fees are paid by the card-issuing bank to the acquiring bank (for the maintenance of the machine). Thus, the Interchange Fee is understood to be mainly the compensation for the Issuing Bank for the statement accumulation period and the post-statement 'Grace Period'. In substance, it is best viewed as the discounting of merchants' receivables until the 'Payment Due Date' when the customer settles the bill either from own sources, or the credit line inherent in the card automatically pays it, and the bank starts charging credit card interest on it. These fees are set by the credit card networks, and are the largest component of the various fees that most merchants pay for the privilege of accepting credit cards, representing 70% to 90% of these fees by some estimates, although larger merchants typically pay less as a percentage. Interchange fees have a complex pricing structure, which is based on the card brand, regions or jurisdictions, the type of credit or debit card, the type and size of the accepting merchant, and the type of transaction (e.g. online, in-store, phone order, whether the card is present for the transaction, etc.). Further complicating the rate schedules, interchange fees are typically a flat fee plus a percentage of the total purchase price (including taxes). In the United States, the fee averages approximately 2% of transaction value. In the EU, interchange fees are capped to 0.3% of the transaction for credit cards and to 0.2% for debit cards, while there is no cap for corporate cards.In recent years, interchange fees have become a controversial issue, the subject of regulatory and antitrust investigations. Many large merchants such as Wal-Mart have the ability to negotiate fee prices, and while some merchants prefer cash or PIN-based debit cards, most believe they cannot realistically refuse to accept the major card network–branded cards. This holds true even when their interchange-driven fees exceed their profit margins. Some countries, such as Australia, have established significantly lower interchange fees, although according to a U.S. Government Accountability Office study, the savings enjoyed by merchants were not passed along to consumers. The fees are also the subject of several ongoing lawsuits in the United States.

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