Finance glossary
Interchange Fee
In simple terms
An interchange fee is a small charge that a shop’s bank pays to your card’s bank each time you pay by card. You do not pay it directly, but it is built into prices.
On this page
What does interchange fee mean?
An interchange fee is paid by the retailer’s bank to the card issuer’s bank when you make a card payment. It is one part of the overall cost a business pays to accept cards.
You never see it as a separate charge, but it affects the price of accepting card payments.
How interchange fees work
On each transaction, a percentage (and sometimes a small fixed amount) flows from the merchant’s payment provider to your bank. In the UK, interchange fees on consumer debit and credit cards are capped by regulation.
Businesses build these and other card-acceptance costs into their general pricing.
How could this affect me?
Interchange fees are mostly invisible to you, but they help explain why some businesses set card-payment minimums or historically added surcharges (now banned for consumer cards).
The regulated cap keeps these costs lower than they once were, which broadly benefits consumers through pricing.
Things to watch out for
- You do not pay it directly, but it is built into prices.
- It is not the same as a surcharge (which is banned on consumer cards).
- Business card fees can differ from consumer card caps.
General information, not personal advice
Consumer Credit is an independent information service. We do not provide regulated financial advice or sell financial products. For advice on your own situation, speak to an appropriately authorised firm or a free service such as MoneyHelper. About Consumer Credit.
Sources
We checked this page against these official and authoritative sources.
- FCA, Payment systems and card fees (opens in a new tab). Accessed 22 Aug 2026.