Whenever a customer uses a credit/debit card to purchase from a store, the merchant's bank account is charged transaction fees, known as interchange fees.
Credit card companies simplify the cost for merchants by incorporating interchange fees into a flat rate plus a percentage of the total sales amount, which includes taxes.
Interchange fees are paid to the card-issuing bank and cover various costs associated with handling the transaction, including fraud and bad debt costs and the risk involved in approving the payment.
Merchants can negotiate their acceptance fees with the acquiring bank they select.
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