Cross-border interchange is the interchange fee that applies when a card issued in one country or region is used to pay a merchant located in another. As with domestic interchange, the fee is paid by the merchant's acquirer to the cardholder's card issuer on each transaction and is set by the card network, but the rates are usually higher. Cross-border interchange applies both to card-present purchases, such as a tourist paying in a shop abroad, and to online purchases from foreign merchants.
Networks distinguish between intra-regional transactions, such as a card from one European country used in another, and inter-regional transactions, such as a US card used at a European merchant. Rates differ for each, and in some places regulators have capped them. Cross-border interchange is one of several costs of international card acceptance, alongside network cross-border fees and currency conversion, all of which are discussed under cross-border card acquiring.
Cross-border interchange in plain terms
Imagine a shop that accepts vouchers from a company in another country. Each time it cashes one in, the foreign company charges it a handling fee, and because the voucher has to be checked and paid across borders, that fee is higher than for a local voucher.
Card payments work in a similar way. When a foreign card is used, the merchant's bank pays the card's home bank a fee, and the fee is larger than for a domestic card. The merchant usually ends up paying it as part of its card processing costs.
How cross-border interchange is set
Each network publishes interchange tables for domestic, intra-regional and inter-regional transactions. The applicable rate depends on the issuer's region and the merchant's location, the card type, such as consumer debit, consumer credit or commercial, and the channel, card-present or card-not-present. Fees are typically a percentage of the transaction value, sometimes with a fixed amount added:
Suppose a customer with a consumer credit card issued in the United States buys goods worth 200 euros online from a merchant in the European Economic Area, and the applicable inter-regional rate is 1.50 per cent with no fixed fee. The interchange fee is 0.015 × 200 = 3.00 euros. If an EEA-issued consumer credit card were used for the same purchase, the regulated rate of 0.30 per cent would give 0.003 × 200 = 0.60 euros. The merchant pays five times more interchange on the foreign card.
Regulation in Europe
The EU Interchange Fee Regulation of 2015 caps interchange for consumer cards at 0.2 per cent for debit and 0.3 per cent for credit on transactions where both issuer and acquirer are in the EEA, covering domestic and intra-EEA cross-border payments. It did not cover cards issued outside the EEA. Following an antitrust investigation, Visa and Mastercard gave the European Commission commitments, accepted in 2019, to cap inter-regional consumer interchange at EEA merchants: 0.2 and 0.3 per cent for card-present payments, and 1.15 per cent for debit and 1.50 per cent for credit card-not-present payments. Commercial cards used by businesses fall outside both the regulation and the commitments, so cross-border interchange on them can be considerably higher.
After Brexit, transactions between the UK and the EEA became inter-regional. In 2021 Visa and Mastercard raised interchange on online payments with UK-issued cards at EEA merchants, and vice versa, from the regulated 0.2 and 0.3 per cent to the inter-regional levels. The UK Payment Systems Regulator investigated, concluded in its market review that the increases had not been justified by changes in costs or service, and moved towards capping them. Merchants should check the current position, as of November 2026, with their acquirer.
Effects on merchants and cardholders
For merchants, cross-border interchange raises the cost of serving international customers, especially online. Merchants on interchange-plus pricing see the higher fee directly; those on blended pricing may see a separate surcharge for foreign cards. Some large merchants open local entities or use local acquiring in key markets, which can reduce network cross-border fees and improve approval rates, although the interchange category still depends on where the merchant is located and where the card was issued. For cardholders, cross-border interchange is invisible, but they may pay separate foreign transaction fees or a mark-up on dynamic currency conversion offered at checkout. Issuers argue that higher cross-border rates reflect greater fraud risk and costs; merchants and regulators have often disputed this.