What Are Interchange Fees and What Can Merchants Do About Them?

All merchants who accept credit and debit cards should be familiar with interchange fees, and that's because interchange fees are a costly expense that significantly reduces a merchant's bottom line. Interchange fees in the US are higher than anywhere else in the world, and last year Visa and Mastercard quietly yet significantly increased their interchange fee rates, a change that's expected to yield them an additional $1.17 billion per year.

Interchange fee rate increases may be good for large payment processing companies, but they greatly affect merchants and sometimes make a would-be profitable merchant unprofitable. However, there are things a merchant can do to get out from under the boot heel of interchange fees.