Interchange fees are charged between banks for processing transactions made on one another's cards via the open Visa or Mastercard systems.

Fees paid by merchant-acquiring banks to cardholder-issuing banks are in place to cover the cost to convert a charge on a cardholder's card to a cash deposit at the merchant business checking account, including cost factors like billing services, credit and fraud risk, profit, etc.

Fees paid by the merchant Bank (acquirer) to the MasterCard and Visa for processing transactions. These fees are paid at the time the transaction is exchanged. Fees vary based on processing method utilized by the merchant.