Glossary · Payments

Interchange

Last reviewed September 14, 2026

Interchange is the fee a merchant's bank pays the card-issuing bank on each transaction; it is the primary funding source for most credit-card rewards.

Rewards are largely financed by interchange. The richer a card's earn rate, the more it typically depends on the interchange its purchases generate.

Understanding interchange explains why some merchants surcharge credit cards, why debit rewards are thin, and why certain categories carry different effective earn rates.

Related terms

Category Multiplier: A category multiplier is the rate at which a card earns rewards in a given spending category — e.g. 4× points on dining or 6% back at U.S. supermarkets.
Cash-Equivalent Value: Cash-equivalent value is the dollar amount a points or miles balance is worth at a chosen redemption rate, used to compare reward currencies against plain cash back.

All glossary terms