Interchange Network

An interchange network is an interconnected electronic system used to transmit transaction data between the banks, processors, and other entities that are part of the payment card transaction process. These networks facilitate every aspect of fund transfers, ensuring that transactions are smooth and secure, and that they comply with established standards and regulations.

There are two main phases of a credit card transaction: authorization and settlement. Both phases require a seamless, real-time flow of data between issuers and acquirers. Understandably, each party in the network bills the merchant a small amount in exchange for the role they play in the transaction process. These costs are collectively known as interchange fees, and are part of every credit sale.