Money & Finance › Payments & money movement › Credit and debit card payments: how a swipe or tap gets paid
Interchange 'swipe' fees merchants pay on card sales
· Concept
Fact, law or dataA rule, statute, definition or measured number.
The fee a merchant's bank pays the cardholder's bank on each card sale, the largest part of what merchants pay to accept cards.
See it on the Money & Finance map →How it works
On a $100 credit sale, a merchant might net about $97.50. Roughly $2 goes to the issuing bank as interchange, set by the network by card type, merchant category and whether the card was present; about 15 cents to the network; the rest to the processor. Premium rewards cards cost the most, near 3%. The Durbin Amendment caps debit interchange at banks over $10 billion in assets at about 22 cents plus 0.05%. Merchants may surcharge credit up to 3% where state law allows.
Why it matters
It funds card rewards and bank profits: US merchants paid about $149 billion in fees to accept credit cards in 2024, versus about $39 billion for debit and prepaid (Nilson).
Facts, rules and data
Visa and Mastercard published interchange schedules, the Fed's Regulation II data, Nilson Report fee totals, and filings in the long-running merchant antitrust case.
Debates and risks
Whether interchange is a fair price for fraud protection and guaranteed payment, or a monopoly toll, is the core of the merchants' fight.
Inside this (1)
Connections (3)
▸Interchange 'swipe' fees merchants pay on card sales are set by Card networks: Visa, Mastercard, American Express, DiscoverFact, law or data
The connection
Visa and Mastercard publish interchange schedules, hundreds of rates by card type, merchant category and whether the card was present, typically updated in April and October. The fee flows from the merchant's bank to the issuer; the network sets it but keeps only its own separate fee.
When and why
In US card markets since the 1970s; the merchants' antitrust case over these rates began in 2005.
How we know
Published interchange rate tables and filings in In re Payment Card Interchange Fee litigation (E.D.N.Y.).
Debates and risks
Whether the November 2025 settlement, cutting average credit rates by 0.10 percentage point for five years, will meaningfully change merchants' costs is disputed.
▸Interchange 'swipe' fees merchants pay on card sales are mostly paid to card-issuing Commercial banks: taking deposits, making loansFact, law or data
The connection
Interchange is revenue for the bank that issued the card, such as Chase, Capital One or Citi. It pays for rewards, fraud losses and the interest-free grace period, and it is a key profit source. Issuers under $10 billion in assets are exempt from the debit cap and earn roughly twice as much per debit swipe.
When and why
US card-issuing banks and credit unions; the debit cap took effect in October 2011.
How we know
Fed Regulation II data (exempt debit transactions averaged about 52 cents in 2023, versus about 22–24 cents for covered ones) and bank earnings reports.
Debates and risks
Whether a credit-card version of the cap, proposed in the Credit Card Competition Act, would lower prices or mostly cut rewards is debated.
▸Durbin Amendment (2010): caps on debit card swipe fees capped debit Interchange 'swipe' fees merchants pay on card salesFact, law or data
The connection
Interchange is paid by the merchant's bank to the cardholder's bank on each sale. Durbin told the Fed to cap debit interchange for issuers with $10 billion or more in assets. The Fed set 21 cents plus 0.05% plus 1 cent, roughly halving the old average of about 44 cents. Credit card interchange, often about 2%, was not capped.
When and why
Regulation II took effect October 1, 2011; the Fed proposed cutting the base to 14.4 cents in 2023, and a 2025 court ruling against the rule is on appeal.
How we know
The Fed's Regulation II, its biennial reports on issuer costs and fee revenue, and the Corner Post v. Federal Reserve court record.
Debates and risks
Whether the cap is too high (merchants' view), too low (banks' view), or beyond the statute, as a 2025 North Dakota ruling now before the Eighth Circuit held.