When a card payment transaction is passed between a merchant and Chase Paymentech, then between us and the payment brands (such as Visa®, MasterCard®), and Discover®, and finally between the payment brands and the bank that issued the card, it is known as interchange.
An interchange fee is charged on every transaction you process, and this fee is paid by the payment processor to the issuing bank through the payment brands. This fee covers the cost to issuing banks for offering lines of credit and fraud mitigation.
Who Determines the Fees and Rates
The payment brands determine interchange fees. The rate that you pay for a transaction varies depending on several factors:
- Type of card (debit, credit, rewards card)
- Type of transaction (the card is present, a phone order, an online order)
- Your average transaction volume
The fee is also tied to the level of risk for that transaction; the lower the risk, the lower the rate will be. So, for example, a transaction conducted in a card-present environment, such as in a store, is a lower risk and fee than in a card-not-present environment, such as on a Web site.
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In addition to interchange fees, the payment brands may charge an assessment fee, which covers the costs of managing their network.
Payment Brands Offer More Information
Understanding interchange rates can be complicated because the payment brands do not have one set rate that applies to every industry or, indeed, every type of transaction. Additionally, rates are adjusted throughout the year. To learn more about current interchange rates, visit the payment brands' Web sites: