Interchange Fee
A fee paid by the merchant's bank to the customer's bank on every card transaction. Set by Visa and Mastercard. Applies to open-loop card payments — not closed-loop.
Definition
Interchange is the fee that the merchant's acquiring bank pays the customer's issuing bank whenever a card is used. It is set by the card networks (Visa, Mastercard, and others), varies by card type, transaction type, and geography, and typically ranges from 0.2% to 3%+ of the transaction value. Interchange is the largest component of the total card processing cost merchants pay. Closed-loop payments (like 7Konto gift cards or corporate meal accounts) do not touch the card networks and therefore have zero interchange — one of the primary economic reasons to use closed-loop for specific merchant categories.
Examples
Visa interchange for consumer debit in the EU: 0.2%
Visa interchange for consumer credit in the EU: 0.3%
Mastercard interchange for premium/business cards in the US: 2-3%+
7Konto closed-loop transaction interchange: 0%
How 7Konto uses this
7Konto transactions carry 0% interchange because they run on a closed-loop ledger, not through Visa or Mastercard. This is one of the main reasons banks and PSPs add 7Konto alongside their card processing business: same customers, same merchants, but a new economic profile for use cases like gift cards, employee allowances, and B2B2E accounts.
Learn more on 7Konto
Related concepts you might want to explore
Closed-Loop Payment
A payment system where funds can only be spent within a defined ecosystem — one merchant, a group of related merchants, or a specific program.
Open-Loop vs Closed-Loop
Open-loop payments (Visa, Mastercard) work across millions of merchants globally. Closed-loop payments work only within a defined ecosystem.
Stored Value
Money or credit held in an account or on a card, available for spending within a defined ecosystem.
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