Mastercard Interchange Fees

Mastercard interchange rates are established by Mastercard, and are generally paid by acquiring banks to the issuing bank on purchase transactions using Mastercard cards.  Merchants pay the Mastercard interchange fee indirectly. All payment processing fees, including the interchange fee, is substracted from total transaction payment amount before deposited into a merchant’s account.

How does Mastercard set Interchange Rates?

Setting Mastercard interchange rates is challenging and  involves extreme balance. If interchange rates are set too high, a merchants’ desire and demand for Mastercard acceptance will drop. If interchange rates are set too low, the willingness of issuing banks to issue and promote Mastercard cards will drop, leading to a drop in consumer demand.

In response to these competitive forces, Mastercard aims to maximize the value of the Mastercard system (including the dollars spent on Mastercard cards, the number and types of cards in circulation, and the number and types of merchants accepting Mastercard cards) by setting default interchange rates at levels that balance the benefits and costs to both cardholders and merchants.

Below are some of the most common Mastercard interchange fees businesses incur as of April 2021 from CreditDonkey. There are dozens of interchange fees (many of which aren’t listed below). The rates vary based on card type, transaction method, and type of business. Mastercard publishes a complete listing of Mastercard interchange fees on their website.

*The credit card networks typically update their interchange fees two times a year, in April and October.