A switch fee is a fee charged by the operator of a payment switch for routing a transaction between the institutions involved. A switch is the central system that receives an authorisation or payment message from one participant, such as an acquirer or ATM operator, and passes it to another, such as the card issuer, returning the response. National ATM and debit networks, regional networks and instant payment systems all charge switch fees, usually a small fixed amount per transaction.
The fee is normally paid by member institutions rather than directly by customers, and is often split between the sending and receiving participants under network rules. Banks and acquirers may pass it on as part of their own pricing, so for merchants it is usually hidden inside the network fee or processing fee. In ATM networks it is separate from the interchange paid to the ATM owner. Comparable charges by card networks are usually called scheme or processing fees.