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Should EMV and Tokenization Drive Interchange Fees Lower?

Every time when we use our debit, credit or prepaid cards at a store, online or over the phone, the Merchant bank (Acquirer) is the one paying an interchange fee (or swipe fee) to the bank that issued the payment card (Issuer). The interchange fee is then passed on to the merchant by the Acquirer, as pretty much the main component of the Merchant Discount Rate (MDR = interchange fee + Acquirer’s margin). The MDR is basically the fee that Merchant pays to its Acquirer for enabling them for acceptance of the payment cards.

The interchange fees are set by Visa and MasterCard and vary in regards to the perceived security risk:

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