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Don’t Expect a ‘Here Lies Interchange’ Epitaph Any Time Soon

Digital Transactions

With potential regulation of credit card interchange looming and with the unwavering demand from merchants for lower card-acceptance costs, the possibility that interchange as it’s known today may dramatically change can’t be entirely dismissed—but don’t count on its demise. That was the conclusion at the Money 20/20 trade show this week in Las Vegas, where a panel discussion, provocatively labeled the “Death of Interchange,” took on interchange’s future.

Merchants pay interchange fees—typically a percentage of each transaction—to the bank that accepts and processes their card payments. For credit cards, the rate usually falls into the 2%-to-4% range on each sale.

“The number-one thing is, merchants hate interchange fees,” Carolina Nucamendi, cofounder and chief executive at Waivr, a pay-by-bank provider, told attendees. “For a long time, they thought of it as a cost of doing business, but more recently have started questioning it.” Los Angeles-based Waivr specializes in account-to-account payments services with a focus on subscription payments.

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