It might be difficult to understand how fees paid from card providers to banks and retailers can affect you as a consumer. However, as these fees are inextricably linked to the level of credit card rewards, changes in so-called ‘interchange fees’ can affect your potential rewards and the fees you ultimately end up paying.
What are ‘interchange fees’?
An ‘interchange fee’ is a term that is often used in the payment card industry. It describes the fee that a retailer or merchant’s bank pays a customer’s bank (the ‘issuing bank’) when merchants and retailers accept cards using card networks such as Visa and MasterCard for purchases.