Rewards

Interchange fee = (percentage × transaction amount) + flat fee

• A percentage of the purchase amount, typically between 1.5% and 3%

• A small fixed transaction fee, often between 5 and 20 cents

RESOURCES

https://www.federalreserve.gov/pubs/feds/2009/200923/200923pap.pdf

https://www.richmondfed.org/publications/research/economic_brief/2011/eb_11-05

https://www.philadelphiafed.org/-/media/frbp/assets/working-papers/2025/wp25-18.pdf

https://www.rba.gov.au/payments-and-infrastructure/review-of-retail-payments-regulation/backgrounders/backgrounder-on-interchange-and-scheme-fees.html

$$\text{Interchange Fee} = (\text{percentage} \times \text{transaction amount}) + \text{flat fee}$$

https://www.paypal.com/us/brc/article/what-is-interchange-plus-plus