also called interchange fee · card interchange
The fee a merchant’s bank pays a cardholder’s bank on a card transaction, baked into merchant pricing.
The fee a merchant's bank pays your card's bank every time you pay by card, baked invisibly into what merchants are charged to accept cards. You never see it as a line item, but it shapes how merchants behave. It is not the foreign transaction fee your own bank charges you; interchange is a cost on the merchant's side, which is why some react by refusing cards or adding a surcharge.
Someone tries to pay by card at a small shop abroad and is told it is cash only, or that there is an extra charge to use the card. The reason sits in the interchange fees the shop is billed on card payments, costs high enough that the owner would rather push customers to cash or local debit.
Explains why some small foreign merchants refuse cards, add surcharges, or prefer local debit schemes.
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