Episode Details

How does a debit or credit card transaction work? What are Swipe Fees? ICBA just released a new Interchange Guide which explains this payment channel for small business customers. A debit or credit card transaction has six steps and includes four parties (cardholder, merchant, acquirer, and issuer). Swipe Fees are what the merchant pays the acquirer to accept the card. Swipe Fees have three parts: Interchange, network fee, and acquirer fee. Interchange is what the issuing bank collects. You can have debit and credit card interchange. Network fees are the portion that card networks such as Visa and Mastercard collect. Acquirer fees are the portion that acquirers such as Square, Strip, PayPal, and Clover keep.