𝗪𝗵𝗮𝘁 𝗶𝘀 𝗶𝗻𝘁𝗲𝗿𝗰𝗵𝗮𝗻𝗴𝗲, 𝗮𝗻𝗱 𝘄𝗵𝗮𝘁 𝗳𝗮𝗰𝘁𝗼𝗿𝘀 𝗶𝗺𝗽𝗮𝗰𝘁 𝘁𝗵𝗲 𝗶𝗻𝘁𝗲𝗿𝗰𝗵𝗮𝗻𝗴𝗲 𝗿𝗮𝘁𝗲? Let’s break it down: Every time a consumer swipes a card to make a purchase, the merchant pays an interchange fee. Revenue from the fee gets divided among parties that facilitated the transaction: the banks that send and receive the payment, the card network, the payment processor, and—more recently—fintechs and businesses that embed payments. When you take the bird-eye view diagram below 👇 as an example: If a user swipes a card issued by a Neobank, $1.70 (interchange fee) goes to the issuing bank and the card network, $0.50 (acquiring fee) goes to the acquiring bank. Interchange fees are not always the same though. 𝗪𝗵𝗮𝘁 𝗳𝗮𝗰𝘁𝗼𝗿𝘀 𝗶𝗺𝗽𝗮𝗰𝘁 𝗶𝗻𝘁𝗲𝗿𝗰𝗵𝗮𝗻𝗴𝗲 𝗿𝗮𝘁𝗲? ► Credit vs. Debit Interchange rates on credit cards are significantly higher than those on debit cards. ► Rewards programs These benefits are financed through higher interchange rates, and have proven to be very popular with consumers. ► Online vs. Offline Online purchases are less secure than in-person purchases. ► Consumer vs. Commercial ...