An interchange fee is the individual charge behind the concept explained in the main entry on interchange: a fee that the merchant's acquirer pays to the cardholder's issuing bank each time a card is used. Rates are set by the card networks, vary by card type, merchant category, region and channel, and are usually a percentage of the transaction value, sometimes plus a fixed amount.
"Interchange" often refers to the whole system of fees and rate tables, while "interchange fee" is the amount charged on a particular transaction. Visa also calls it the interchange reimbursement fee. It is the largest component of the merchant discount rate, and acquirers either pass it through visibly under interchange-plus pricing or include it in a blended rate.
Interchange fees are regulated in some places, such as the European Union's caps on consumer card interchange and the US cap on debit interchange for large issuers. Merchants seek lower rates through interchange optimization.