Card Interchange Income — Issuing Bank Receives from Acquirer
Recording the interchange fee received from the acquiring bank for a cardholder purchase transaction.
| Account Name | Type | Debit ($) | Credit ($) |
|---|---|---|---|
| Interchange Receivable (Card Network Settlement) | Asset (+) | 3.50 | - |
| Interchange Income (Card Issuing) | Revenue (+) | - | 3.50 |
💡 Accountant's Note
The issuing bank (cardholder's bank) receives interchange from the acquiring bank (merchant's bank) for each card transaction. This compensates the issuer for fraud risk, credit risk, and customer acquisition costs. The rate is set by the card scheme (Visa/MC/JONET).
Practitioner & Systems Framework
💻 ERP Architecture
Interchange is automatically calculated and settled by the card scheme in the batch settlement run. The settlement net amount (interchange received minus scheme fees) is posted to the bank's account by the card scheme and then reflected in the CMS-to-GL interface. Individual transaction interchange is typically not posted separately — it is settled in aggregate by the scheme.
⚠️ Audit Flags
Auditors reconcile total interchange income to the card scheme settlement statements. The interchange rate must comply with the card scheme's published interchange fee schedules. For domestic transactions on JONET, interchange rates are regulated by CBJ.
📄 Required Documentation
Card scheme settlement statement, CMS interchange income report, JONET/Visa/MC interchange rate schedule, and monthly reconciliation of CMS to GL.
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