12 Facts About Interchange fees

Interchange fees fee is a term used in the payment card industry to describe a fee paid between banks for the acceptance of card-based transactions.

For cash withdrawal transactions at ATMs the Interchange fees are paid by the card-issuing bank to the acquiring bank .

Interchange fees collected by Visa and MasterCard totaled $26 billion in 2004.

Interchange fees are set by the payment networks such as Visa and MasterCard.

Research by Professor Adam Levitin of Georgetown University Law Center indicates that interchange fees were originally designed as a method for banks to avoid usury and Truth-in-Lending laws.

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Interchange fees rates are established at differing levels for a variety of reasons.

In recent years, interchange fees have become a controversial issue, the subject of regulatory and antitrust investigations.

The Interchange fees are the subject of several ongoing lawsuits in the United States.

Merchant groups in particular, including the U S -based Merchants Payments Coalition and Merchant Bill of Rights, claim that interchange fees are much higher than necessary, pointing to the fact that even though technology and efficiency have improved, interchange fees have more than doubled in the last 10 years.

Payment Card Interchange fees Fee and Merchant Discount Antitrust Litigation is a United States class-action lawsuit filed in 2005 by merchants and trade associations against Visa, MasterCard, and numerous financial institutions that issue payment cards.

In 2006, the New Zealand Commerce Commission issued proceedings against Visa and MasterCard, alleging that interchange fees constitute price fixing and result in a substantial lessening of competition.

The Commission released a report in 2013 reviewing the outcome of the settlement, showing that many merchants were paying higher Interchange fees for accepting credit cards than before the settlement.