Understanding Interchange
Find out what interchange is and the value it delivers
What is interchange?
Interchange is a small fee paid by a merchant's bank (acquirer) to a cardholder's bank (issuer) to compensate the issuer for the value and benefits that merchants receive when they accept electronic payments. It enables banks that issue electronic payments to deliver tremendous value to merchants, governments and consumers.
Interchange helps maximise the value delivered to all stakeholders
Australian Businesses
Business benefits in many ways as a result of interchange including reducing the significant costs associated with counting, safeguarding and transporting cash and limiting the losses that occur when cash received is lost or stolen. Merchants who accept cards also receive the most important commercial benefit: they increase sales. Studies show that consumers spend more when they use cards and merchants make more money when they accept cards. This is not surprising since shoppers using cards are not limited to cash on hand but can access their funds on deposit or credit available from their banks when they make their purchasing decisions. Interchange provides convenience, security and fraud prevention and supports the use of credit cards, which increases sales and guarantees payment for those businesses who accept Mastercard cards. For example, payment is guaranteed to the business when a good is sold but the cardholder does not pay their credit card bill.
Businesses benefit from guaranteed payment, increased sales and lower processing costs than those associated with paper payments such as cash and cheques. Electronic payments also provide them with the ability to attract and retain customers with a fast and efficient buying experience.
- Credit and debit card transactions are 4.5 and 2.5 times larger than cash purchases respectively
- Every year, banks write off 2-4% of credit card balances as losses – a cost that would sit with retailers without interchange
- When compared to acceptance of cash, the additional value provided to merchants by electronic payments is about 3 to 4 times the total cost of acceptance
Retailers, in particular, have seen the value of interchange through increased speed at the point of sale, leveraging ‘tap and go’ or contactless transactions, reducing fraud, the cost of handling cash, and reducing the amount of cash held in stores (making stores safer for team members).
Governments
Electronic payments facilitate economic activity and provide the necessary infrastructure for citizens and businesses to interact in a financial ecosystem. Government and the public sector are major beneficiaries of interchange as they utilise many different payment options including commercial cards. For example, electronic payments have revolutionised welfare payments systems
Electronic payments help safeguard against waste, fraud and abuse
- Using electronic payments to deliver social benefits is more efficient and secure
- Black and grey economies fueled by untraceable and untaxable cash payments flourish where electronic payments use is low
Consumers
Interchange delivers major benefits to consumers. Not only does it allow businesses to accept their cards, it contributes to the cost of fraud prevention and pays for the interest free days on credit cards. For example, in the event of a stolen card, Mastercard cardholders are protected from fraud or unauthorised transactions under Mastercard’s Zero Liability Policy (For more information click here) Convenience and safety, increased opportunity for financial inclusion, access to rewards and incentives and the choice of thousands of innovative credit, debit and prepaid payment products are among the many benefits consumers derive from electronic payments.
- Payments allow consumers to access money whenever and wherever they want
- Interchange makes it possible for issuers to provide consumers with interest-free periods on credit cards
- Electronic payments provide consumers with a more secure and efficient way to pay - whether in-person, online or in-app
Our role
Mastercard does not earn revenue from interchange.
Mastercard sets interchange rates within limits determined by the Reserve Bank of Australia and based on the value delivered by the issuing bank as well as the benefits of accepting electronic payments. Setting interchange at the right level is important because if interchange rates are set too high, merchants may choose not to accept cards; and, if interchange is set too low, issuing banks have no incentive to cover the risks of issuing payment cards.
Setting interchange rates at the appropriate level also helps ensure that both issuers and acquirers deliver services that optimise the effectiveness of the payments system and spur development of innovative payment solutions.
Flexible interchange rates make it possible for electronic payments to deliver maximium value at the lowest cost for both merchants and consumers. Interchange also promotes credit availability for small businesses and is a key driver for financial inclusion when set at the optimal level.
The benefits that interchange delivers to all parties
Click or scroll to see the options available

Consumers
Consumers
Consumers derive significant value from electronic payments including convenience and safety when they make a purchase, increased opportunity for financial inclusion, access to rewards or incentives and the choice of thousands of debit, credit and prepaid payment products.

Merchants
Merchants
Merchants benefit from guaranteed payment; increased sales; fraud protection; lower processing costs than those associated with other forms of payment such as checks and cash; and the ability to attract and retain customers with a fast, efficient buying experience.

Issuers
Issuers
Interchange helps card Issuers cover the eligible costs they incur, including processing and authorisation, fraud and fraud protection, and it funds new payment technologies. For example, interchange funds innovations in payment technologies like Tap and go™, which better facilitate transactions and improve customer service.

Governments
Governments
Governments experience significant efficiencies and promote financial inclusion for their citizens when they choose to distribute social benefits and other programs via electronic payments.

Society
Society
Electronic payments are often the point of entry for new consumers to a formal financial ecosystem. By incentivising issuers to create innovative payment programs, interchange helps encourage financial inclusion for consumers who could not otherwise participate.
What you need to know
Learn more about interchange and the benefits of the system it helps support through the following resources:
Consequences of the Mandated Decrease of Interchange Fees in the United States
Impact of Regulation in Australia
In accordance with clause 6.1 of the Reserve Bank of Australia's Standard No.1 of 2016 - The Setting of Interchange Fees in the Designated Credit Card Schemes and Net Payments to Issuers and clause 6.1 of Standard No.2 of 2016-The Setting of Interchange Fees in the Designated Debit and Prepaid Card Schemes and Net Payments to Issuers (the "Standards") made under the Payments Systems (Regulation) Act 1998, Mastercard hereby advises that, effective immediately, the following interchange fees will apply to Mastercard transactions that are acquired in Australia and are initiated with a card issued within Australia.
Australia Intracountry Credit POS Interchange Rates
Interchange Category Name | Priority | Rate excl. GST | Rate incl. GST |
---|---|---|---|
Charities | 1 | 0.00% | 0.00% |
Mastercard Initiated Rewards | 1 | 0.00% | 0.00% |
Commercial Executive | 2 | 0.80% | 0.88% |
Strategic Merchants 1 | 3 | 0.18% | 0.198% |
Strategic Merchants 2 | 4 | 0.21% | 0.231% |
Strategic Merchants 3 | 5 | 0.25% | 0.275% |
Tokenised Contactless | 6 | 0.80% | 0.88% |
Commercial | 7 | 0.62% | 0.682% |
Tokenised Online | 8 | 0.18% | 0.198% |
Consumer Elite and Super Premium | 9 | 0.78% | 0.858% |
Consumer Premium - High Spend | 10 | 0.67% | 0.737% |
Consumer Premium | 11 | 0.45% | 0.495% |
Government, Utilities and Insurance | 12 | 0.10% | 0.11% |
Petroleum | 13 | 0.10% | 0.11% |
Education and Learning | 14 | 0.10% | 0.11% |
Recurring Payments | 15 | 0.10% | 0.11% |
Consumer Standard | 16 | 0.19% | 0.209% |
Mastercard Credit Interchange Qualification Criteria
Interchange Category | Description |
---|---|
Charities | Available to merchants set up with card acceptor business code (MCC) 8398 that are recognised by the Australian Taxation Office as charitable organisations. |
Mastercard Initiated Rewards | Applicable to a MasterCard initiated transaction for earn and redemption on Pay With Rewards (PWR). |
Commercial Executive | Available for Commercial Corporate Executive and Commercial Business Executive card transactions, except for transactions that would qualify for Charities and/or Mastercard Initiated Rewards. |
Strategic Merchants 1 | Currently available to card present and card not present transactions of merchants and / or merchant groups (as advised by Mastercard from time to time), that meet certain qualifying criteria deemed to be strategic to Mastercard, except for transactions that would qualify for Charities, Mastercard Initiated Rewards and/or Commercial Executive. |
Strategic Merchants 2 | Currently available to card present and card not present transactions of merchants and / or merchant groups (as advised by Mastercard from time to time), that meet certain qualifying criteria deemed to be strategic to Mastercard, except for transactions that would qualify for Charities, Mastercard Initiated Rewards, Commercial Executive and/or Strategic Merchants 1. |
Strategic Merchants 3 | Currently available to card present and card not present transactions of merchants and / or merchant groups (as advised by Mastercard from time to time), that meet certain qualifying criteria deemed to be strategic to Mastercard, except for transactions that would qualify for Charities, Mastercard Initiated Rewards, Commercial Executive, Strategic Merchants 1 and/or Strategic Merchants 2. |
Tokenised Contactless | Available for Tokenised Contactless transactions, except for transactions that would qualify for Charities, Mastercard Initiated Rewards, Commercial Executive and/or Strategic Merchants. Tokenised Contactless transactions must be correctly identified using the Wallet Identifier in the authorisation and clearing messages. |
Commercial | Available for Commercial card transactions, except for transactions that would qualify for Charities, Mastercard Initiated Rewards, Commercial Executive, Strategic Merchants and/or Tokenised Contactless. |
Tokenised Online | Available for Tokenised Online transactions, except for transactions that would qualify for Charities, Mastercard Initiated Rewards, Commercial Executive, Strategic Merchants, Tokenised Contactless and/or Commercial. Tokenised Online transactions must be correctly identified using the Wallet Identifier in the authorisation and clearing messages. |
Consumer Elite and Super Premium | Available for Consumer World Elite™ and Consumer World card transactions, except for transactions that would qualify for Charities, Mastercard Initiated Rewards, Commercial Executive, Strategic Merchants, Tokenised Contactless, Commercial and/or Tokenised Online. |
Consumer Premium High Spend | Available for qualifying Consumer Platinum Product Portfolio card transactions that meet certain criteria (determined at the sole discretion of Mastercard and consistently applied in the Australian market), except for transactions that would qualify for Charities, Mastercard Initiated Rewards, Commercial Executive, Strategic Merchants, Tokenised Contactless, Commercial, Tokenised Online and/or Consumer Elite and Super Premium. |
Consumer Premium | Available for Consumer Platinum card transactions, except for transactions that would qualify for Charities, Mastercard Initiated Rewards, Commercial Executive, Strategic Merchants, Tokenised Contactless, Commercial, Tokenised Online, Consumer Elite and Super Premium and/or Consumer Premium High Spend. |
Government, Utilities & Insurance | Available to the following MCCs: 9211, 9222, 9223, 9311, 9399, 9402, 9405, 4812, 4813, 4814, 4816, 4821, 4899, 4900, 5960, 6300, except for transactions that would qualify for Charities, Mastercard Initiated Rewards, Commercial Executive, Strategic Merchants, Tokenised Contactless, Commercial, Tokenised Online, Consumer Elite and Super Premium, Consumer Premium High Spend and/or Consumer Premium. |
Petroleum | Available to the following MCCs: 5541, 5542, except for transactions that would qualify for Charities, Mastercard Initiated Rewards, Commercial Executive, Strategic Merchants, Tokenised Contactless, Commercial, Tokenised Online, Consumer Elite and Super Premium, Consumer Premium High Spend, Consumer Premium and/or Government, Utilities & Insurance. |
Education & Learning | Available to the following MCCs: 8211, 8220, 8241, 8244, 8249, 8299, 8351, except for transactions that would qualify for Charities, Mastercard Initiated Rewards, Commercial Executive, Strategic Merchants, Tokenised Contactless, Commercial, Tokenised Online, Consumer Elite and Super Premium, Consumer Premium High Spend, Consumer Premium, Government, Utilities & Insurance and/or Petroleum. |
Recurring Payments | Available for transactions containing the Recurring Payment indicator, except for transactions that would qualify for Charities, Mastercard Initiated Rewards, Commercial Executive, Strategic Merchants, Tokenised Contactless, Commercial, Tokenised Online, Consumer Elite and Super Premium, Consumer Premium High Spend, Consumer Premium, Government, Utilities & Insurance, Petroleum and/or Education & Learning. |
Consumer Standard | Available for all domestic credit transactions not qualifying for any other interchange category. |
Australia Intracountry Debit POS Interchange Rates
Interchange Category Name | Priority | Rate excl. GST | Rate incl. GST |
---|---|---|---|
Charities | 1 | AUD 0.00 | AUD 0.00 |
Mastercard Initiated Rewards | 1 | AUD 0.00 | AUD 0.00 |
Strategic Merchants 1 – Debit | 2 | AUD 0.01 | AUD 0.011 |
Strategic Merchants 2 – Debit | 3 | AUD 0.02 | AUD 0.022 |
Strategic Merchants 3 – Debit | 4 | AUD 0.03 | AUD 0.033 |
Tokenised Contactless - Low Value (<= AUD 15) | 5 | AUD 0.04 | AUD 0.044 |
Tokenised Contactless – Other (> AUD 15) | 6 | AUD 0.15 | AUD 0.165 |
Transit Contactless | 7 | AUD 0.06 | AUD 0.066 |
Other Card Present - Standard | 8 | AUD 0.04 | AUD 0.044 |
Other Card Present - Premium | 9 | AUD 0.15 | AUD 0.165 |
Other Card Present - Commercial | 10 | 0.20% | 0.22% |
Tokenised Online | 11 | AUD 0.08 | AUD 0.088 |
Other Card Not Present - Standard | 12 | AUD 0.15 | AUD 0.165 |
Other Card Not Present - Premium | 13 | 0.20% | 0.22% |
Other Card Not Present - Commercial | 14 | 0.20% | 0.22% |
1.00% |
1.00% |
1.00% |
1.00% |
1.00% |
Mastercard Debit Interchange Qualification Criteria
Interchange Category | Description |
---|---|
Charities | Available to merchants set up with card acceptor business code (MCC) 8398 that are recognised by the Australian Taxation Office as charitable organisations |
Mastercard Initiated Rewards | Applicable to a Mastercard initiated transaction for earn and redemption on Pay With Rewards (PWR).; |
Strategic Merchants 1 | Currently available to card present and card not present transactions of merchants and / or merchant groups (as advised by Mastercard from time to time), that meet certain qualifying criteria deemed to be strategic to Mastercard, except for transactions that would qualify for Charities and/or Mastercard Initiated Rewards. |
Strategic Merchants 2 | Currently available to card present and card not present transactions of merchants and / or merchant groups (as advised by Mastercard from time to time), that meet certain qualifying criteria deemed to be strategic to Mastercard, except for transactions that would qualify for Charities, Mastercard Initiated Rewards and/or Strategic Merchants 1. |
Strategic Merchants 3 | Currently available to card present and card not present transactions of merchants and / or merchant groups (as advised by Mastercard from time to time), that meet certain qualifying criteria deemed to be strategic to Mastercard, except for transactions that would qualify for Charities, Mastercard Initiated Rewards, Strategic Merchants 1 and/or Strategic Merchants 2. |
Tokenised Contactless – Low Value | Available for Tokenised Contactless transactions equal to or less than AUD 15, except for transactions that would qualify for Charities, Mastercard Initiated Rewards and/or Strategic Merchants. Tokenised Contactless transactions must be correctly identified using the Wallet Identifier in the authorisation and clearing messages. |
Tokenised Contactless – Other | Available for Tokenised Contactless transactions, except for transactions that would qualify for Charities, Mastercard Initiated Rewards, Strategic Merchants and/or Tokenised Contactless – Low Value. Tokenised Contactless transactions must be correctly identified using the Wallet Identifier in the authorisation and clearing messages. |
Transit Contactless | Available for Transit Contactless transactions, except for transactions that would qualify for Charities, Mastercard Initiated Rewards, Strategic Merchants and/or Tokenised Contactless. Transit Contactless transactions must be correctly identified using the Transit Indicator in the authorisation and clearing messages. |
Other Card Present - Standard | Available for all Card Present transactions on Standard products, except for transactions that would qualify for Charities, Mastercard Initiated Rewards, Strategic Merchants, Tokenised Contactless and/or Transit Contactless. |
Other Card Present – Premium | Available for all Card Present transactions on Premium products, except for transactions that would qualify for Charities, Mastercard Initiated Rewards, Strategic Merchants, Tokenised Contactless and/or Transit Contactless. |
Other Card Present – Commercial | Available for all Card Present transactions on Commercial products, except for transactions that would qualify for Charities, Mastercard Initiated Rewards, Strategic Merchants, Tokenised Contactless and/or Transit Contactless. |
Tokenised Online | Available for Tokenised Online transactions, except for transactions that would qualify for Charities, Mastercard Initiated Rewards and/or Strategic Merchants. Tokenised Online transactions must be correctly identified using the Wallet Identifier in the authorisation and clearing messages. |
Other Card Not Present - Standard | Available for all Card Not Present transactions on Standard products, except for transactions that would qualify for Charities, Mastercard Initiated Rewards, Strategic Merchants and/or Tokenised Online. |
Other Card Not Present Premium | Available for all Card Not Present transactions on Premium products, except for transactions that would qualify for Charities, Mastercard Initiated Rewards, Strategic Merchants and/or Tokenised Online. |
Other Card Not Present – Commercial | Available for all Card Not Present transactions on Commercial products, except for transactions that would qualify for Charities, Mastercard Initiated Rewards, Strategic Merchants and/or Tokenised Online. |
Mastercard Debit and Prepaid Purchase with Cashback Rate
All Products | |
---|---|
Group | Rate incl. GST |
All | -AUD 0.175 |
Interchange Category | Description |
---|---|
Purchase with Cash Back | Available for all Debit and prepaid Mastercard cards at Australian merchants where service is provided. Applicable to Cashback component of transaction only. |
Australia Intracountry Prepaid POS Interchange Rates
Interchange Category Name | Priority | Rate excl. GST | Rate incl. GST |
---|---|---|---|
Charities | 1 | AUD 0.00 | AUD 0.00 |
Mastercard Initiated Rewards | 1 | AUD 0.00 | AUD 0.00 |
Strategic Merchants 1 - Prepaid | 2 | AUD 0.01 | AUD 0.011 |
Strategic Merchants 2 - Prepaid | 3 | AUD 0.02 | AUD 0.022 |
Strategic Merchants 3 - Prepaid | 4 | AUD 0.03 | AUD 0.033 |
Other Card Present - Standard | 5 | AUD 0.05 | AUD 0.055 |
Other Card Present - Premium | 6 | AUD 0.15 | AUD 0.165 |
Other Card Present - Commercial | 7 | 0.20% | 0.22% |
Other Card Not Present - Standard | 8 | AUD 0.15 | AUD 0.165 |
Other Card Not Present - Premium | 9 | 0.20% | 0.22% |
Other Card Not Present - Commercial | 10 | 0.20% | 0.22% |
Mastercard Prepaid Interchange Qualification Criteria
Interchange Category | Description |
---|---|
Charities | Available to merchants set up with MCC 8398 that are recognised by the Australian Taxation Office as charitable organisations. |
Mastercard Initiated Rewards | Applicable to a Mastercard initiated transaction for earn and redemption on Pay With Rewards (PWR). |
Strategic Merchants 1 | Currently available to card present and card not present transactions of merchants and / or merchant groups (as advised by Mastercard from time to time), that meet certain qualifying criteria deemed to be strategic to Mastercard, except for transactions that would qualify for Charities and/or Mastercard Initiated Rewards. |
Strategic Merchants 2 | Currently available to card present and card not present transactions of merchants and / or merchant groups (as advised by Mastercard from time to time), that meet certain qualifying criteria deemed to be strategic to Mastercard, except for transactions that would qualify for Charities, Mastercard Initiated Rewards and/or Strategic Merchants 1. |
Strategic Merchants 3 | Currently available to card present and card not present transactions of merchants and / or merchant groups (as advised by Mastercard from time to time), that meet certain qualifying criteria deemed to be strategic to Mastercard, except for transactions that would qualify for Charities, Mastercard Initiated Rewards, Strategic Merchants 1 and/or Strategic Merchants 2. |
Other Card Present – Standard | Available for all Card Present transactions on Standard products, except for transactions that would qualify for Charities, Mastercard Initiated Rewards and/or Strategic Merchants. |
Other Card Present – Premium | Available for all Card Present transactions on Premium products, except for transactions that would qualify for Charities, Mastercard Initiated Rewards and/or Strategic Merchants. |
Other Card Present – Commercial | Available for all Card Present transactions on Commercial products, except for transactions that would qualify for Charities, Mastercard Initiated Rewards and/or Strategic Merchants. |
Other Card Not Present – Standard | Available for all Card Not Present transactions on Standard products, except for transactions that would qualify for Charities, Mastercard Initiated Rewards and/or Strategic Merchants. |
Other Card Not Present – Premium | Available for all Card Not Present transactions on Premium products, except for transactions that would qualify for Charities, Mastercard Initiated Rewards and/or Strategic Merchants. |
Other Card Not Present – Commercial | Available for all Card Not Present transactions on Commercial products, except for transactions that would qualify for Charities, Mastercard Initiated Rewards and/or Strategic Merchants. |
Mastercard Debit and Prepaid Purchase with Cashback Rate
All Products | |
---|---|
Group | Rate incl. GST |
All | -AUD 0.175 |
Interchange Category | Description |
---|---|
Purchase with Cash Back | Available for all Debit and prepaid Mastercard cards at Australian merchants where service is provided. Applicable to Cashback component of transaction only. |
Mastercard reserves the right to change these fees as it deems appropriate from time to time. Any such changes to these fees will be published on this site as required by the Standard.
Enquiries regarding interchange fees should be directed to Mastercard Worldwide at (02) 9466 3700.