3.5% isn't what merchants pay unless you're tiny. Highest interchange is around 2.5 and maybe you'll pay 0.25% in settlement fees. What interchange covers ma

3.5% isn't what merchants pay unless you're tiny. Highest interchange is around 2.5 and maybe you'll pay 0.25% in settlement fees. What interchange covers mainly is the cost of capital to give a consumer a 60 day interest free loan. Capital isn't free and this has real world costs to the bank underwriting the loans. Why you Chase or BOA debit card interchange rates are 0.05% because they aren't lending out their own money.