Internet Service Providers (ISPs) and network operators to exchange traffic between their networks, generally referred to as autonomous systems, by means of mutual peering agreements, which allow traffic to be exchanged at no cost.

Organizations that connect their networks to an IXP benefit from reduced reliance on expensive international transit for exchanging local traffic between themselves, and improved efficiency of their operations and communications. Not only will this reduce transport costs and network latency, but will also ensure faster access to local content because local traffic is exchanged locally, rather than through one or more 3rd party networks including international links. This exchange of traffic between networks at an IXP is known as ‘peering’.