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Interchange Basics: How Does It Work, and Where Does the Money Go?

Have you ever wondered what interchange is, and why you’re charged fees for it? Here’s what you need to know.

What is interchange?

When a customer makes a purchase using a credit or debit card, your business pays a fee to a credit card processor. That fee is made up of three separate parts: processor markup, assessments and interchange. Interchange makes up the biggest part of that fee, and it’s an essential part of the system that transfers the customer’s funds from their account into yours.

How does interchange work, and why is a fee necessary?

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