Every time a transaction is made via a card network or scheme (such as Visa, Mastercard, Amex or Discover), the acquirer (typically a bank that is licensed by financial regulators and card schemes to relay transactions) pays the cardholder’s bank an interchange fee. The business - such as yours - pays the interchange fee back to the acquirer as part of its card processing fees.

Figure: Fees associated with a card transaction

Payment card processing fee comprises of the following:

  • Acquirer markup: Charged by the acquirer for acquiring the funds from your guest

  • Card scheme fees: Charged by the card scheme for using its network (such as Visa, MasterCard)

  • Interchange fee: Charged by issuing bank which is the cardholder’s (or guest’s) bank

Note: Interchange fees make up the most significant portion of card processing fees.

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