Interchange vs. Discount Rate

Interchange rates vary based on transaction characteristics and are one component of card acceptance cost. The merchant discount rate can combine interchange with network fees and processor charges.

When finance verifies processing fees, it needs to distinguish underlying interchange from the processor’s overall pricing and markup. Treating every fee as a single rate can obscure what produced the amount charged.

A transaction carries interchange and network costs, plus the processor’s contracted markup. Those components together contribute to the merchant’s total processing cost.