Interchange

The process of authorization and settlement of card transactions through VISA or MasterCard. Interchange includes the transmittal of cardholder information, transaction data, and fees. The amount card associations charge acquirers for each card transaction they process. The card associations pay the interchange fee to the issuer as compensation for expenses incurred in providing lines of credit to cardholders. The acquirer’s cost is passed on to merchants as a part of the discount rate.