What is Interchange?
Interchange is an unavoidable fee paid by a merchant to a cardholder’s bank to compensate for the value and benefits that the card holder receive when they use their credit card for payments. It enables banks that issue electronic payments to deliver tremendous value to merchants, governments and consumers.
Interchange rates are based on the value delivered by the issuing bank and the benefits of using electronic payments. Setting interchange at the right level is important because if interchange rates are set too high, merchants may choose not to accept cards; and, if interchange is set too low, issuing banks have no incentive to cover the risks of issuing payment cards. Setting interchange rates at the appropriate level also helps ensure that both issuers and acquirers deliver services that optimize the effectiveness of the payments system and spur development of innovative payment solutions. Flexible interchange rates make it possible for electronic payments to deliver maximum value at the lowest cost for both merchants and consumers. Interchange also promotes credit availability for small businesses and is a key driver for financial inclusion when set at the optimal level.
Payment processors are responsible for passing through the interchange rate set by the card brand to their merchants; this is typically done throughout the billing period, so that a merchant sees a final interchange rate on their regular bill.
Consumers
Consumers derive significant value from electronic payments including convenience and safety when they make a purchase, increased opportunity for financial inclusion, access to rewards or incentives and the choice of thousands of debit, credit and prepaid payment products.
Merchants
Merchants benefit from guaranteed payment; increased sales; fraud protection; lower processing costs than those associated with other forms of payment such as cheques and cash; and the ability to attract and retain customers with a fast, efficient buying experience.
Financial Institutions
By receiving interchange fees from the merchant’s bank, issuers are able to bear the risks and costs associated with extending electronic payments to their customers.
| Visa Canada Consumer Credit Interchange Rates 2021 | |||
|---|---|---|---|
| Interchange Program | Classic/Gold/Platinum | Infinite | Visa Infinite Privelege |
| Standard | 1.45% | 1.70% | 2.45% |
| Electronic | 1.25% | 1.57% | 2.08% |
| Card Not Present | 1.40% | 1.65% | 2.40% |
| Performance Program - Card Present | 1.20% | 1.49% | 1.95% |
| Industry Program - Gas | 1.07% | 1.34% | 1.95% |
| Industry Program - Grocery and Food Retail | 1.00% | 1.20% | 1.95% |
| Industry Program - Everyday Needs | 1.20% | 1.30% | 1.95% |
| Recurring Payments | 1.25% | 1.53% | 1.95% |
| Emerging Segments | 0.98% | 1.17% | 1.95% |
| Performance Program - Card Not Present | 1.35% | 1.60% | 2.35% |
| Industry Program - Grocery and Food Retail | 1.23% | 1.42% | 1.95% |
| Mastercard Canada Consumer Credit Interchange Rates 2021 | |||
|---|---|---|---|
| Interchange Program | Core | World | World Elite |
| Card Present EMV | 0.92% | 1.22% | 1.56% |
| Unsecure Card Present (Mag Stripe) | 1.22% | 1.52% | 1.86% |
| Digital Commerce | 1.76% | 2.00% | 2.24% |
| Contactless | 0.87% | 1.16% | 1.48% |
| SecureCode / 3DS | 1.50% | 1.70% | 1.90% |
| Utilities | $0.10 | $0.10 | $0.10 |
| Charity | 0.92% | 1.22% | 1.56% |
| Standard | 2.06% | 2.30% | 2.54% |
| American Express Consumer Credit Card Interchange Rates 2021 | |
|---|---|
| Tier 1 - Over $1000 | |
| Electronic | 2.00% |
| Card Not Present | 2.30% |
| Foreign | 2.40% |
| Card Not Present + Foreign | 2.70% |
| Discover Canada Consumer Credit Interchange Rates 2021 | |
|---|---|
| Interchange Program | Core Reward |
| CPSL - Recurring Payments | 1.37% |
| CPSL - Supermarket/Warehouse Clubs | 1.32% |
| CPSL - Petroleum | 1.18% |
| CPSL - Retail | 1.45% |
| Union Pay (UPI) - Card Present Interchange Rates 2021 | |
|---|---|
| Cards | Rate |
| Credit Card | 1.10% |
| Debit Card | 1.10% |