Interchange
Interchange is the fee paid to the card issuer on each card payment, collected through the acquirer at a rate the card scheme publishes. For most businesses that accept cards it is the largest single layer of processing cost, and in the UK and EEA consumer card interchange is capped by regulation.
How interchange is calculated
Interchange is a percentage of the transaction value, sometimes with a fixed amount added, taken from the scheme's rate table. The rate depends on the card type, where the card was issued, where it was used, how it was presented and the merchant category. Each transaction falls into exactly one interchange category, and that category sets the rate.
Regulators cap some categories. Under the EU Interchange Fee Regulation, and its UK equivalent, consumer debit interchange is capped at 0.2% and consumer credit at 0.3% of the transaction value (Ryft, 2026). Online payments between the UK and the EEA fell outside those caps after Brexit, and their interchange rose to 1.15% for debit and 1.5% for credit. The PSR dropped an interim cap in October 2025, and the High Court confirmed in January 2026 that it still has the power to set one (PSR decision, October 2025; FStech). Other markets set their own limits: Brazil caps debit interchange at 0.5% and prepaid at 0.7% (PaymentsJournal).
Where interchange goes wrong on a bill
Most interchange errors come from a transaction placed in the wrong category. When the card's issuing region, card type or authentication data is missing or misread, a higher rate applies, which the industry calls a downgrade. The rest come from bills that merge interchange with other fees, so nobody can see which rate was used.
Regional mistakes cost the most. A UK consumer debit card used at a UK merchant should sit in the capped domestic category; the same payment tagged as an EEA card lands in a category several times more expensive. On interchange++ pricing, interchange should pass through at the scheme rate, so any charge above it for that category is a discrepancy. On blended pricing the acquirer folds interchange into one rate, and an error stays hidden until you ask for interchange-level detail.
How to check interchange
To check interchange, recalculate it for each transaction from the scheme's rate table and compare the result with what you were billed. You need transaction-level data that shows card type, issuing and acquiring region, presentment method and merchant category, plus the rate tables in force for that month.
- Assign every transaction to its interchange category using those fields.
- Apply the published rate for that category and compute the expected fee.
- Compare expected with billed, per transaction where the data allows, otherwise per category.
- Group the differences by category and look first at the largest.
FeeVerify runs the same steps on every transaction in the month, with no sampling, and links each difference to the rule and clause that set the expected rate.
Worked example
In this example a merchant's month contains 10,000 UK consumer debit transactions at an average of £40. The whole month should be billed at the capped 0.2%, but 600 transactions arrive tagged as EEA-issued cards, although their card range shows UK issue, and are billed at the cross-border rate of 1.15%. The figures are synthetic.
| Transactions | Value | Rate billed | Billed | Expected at 0.2% |
|---|---|---|---|---|
| 9,400 | £376,000 | 0.2% | £752 | £752 |
| 600 | £24,000 | 1.15% | £276 | £48 |
| 10,000 | £400,000 | £1,028 | £800 |
The variance is £228 for the month. It is small on one bill, and it repeats every month until the card range data is fixed. Across several acquirers and a year of trading, a tagging error like this adds up, and it is invisible in a monthly interchange total. Synthetic figures for illustration.
Start with one month of your own data.
A pilot begins with the agreements that protect both sides, then your contracts and one month of settlement data, scoped with a payments specialist on the first call. The 30-day diagnostic re-costs every transaction against them and shows each variance with its clause, before any recurring fee.