When a customer pays with a credit card, the money doesn’t go straight to you—the merchant. Instead, several players take a small cut of each transaction. So, who exactly gets paid, and how much do you get to keep?
Let’s break it down using the Interchange Plus pricing model, also known as Cost Plus pricing. This is considered the most transparent pricing structure in the payment processing industry because it separates the fixed fees (set by banks and card brands) from the processor’s markup.
Below is a visual representation of a $100 sale using a Visa Infinite credit card, showing how much each party takes from the transaction and what you're left with.
The Key Players and Their Fees
Here’s where your money goes during a typical card transaction:
- Interchange Fee → Issuing Bank
This is the largest portion of the fee, paid to your customer’s bank (e.g., Scotiabank). The rate depends on the card type, how the payment was made (in-store, online, etc.), and the type of business you run. - Assessment Fee → Card Brand (e.g., Visa, Mastercard)
A small, non-negotiable percentage of each transaction is paid to the card brand. It typically ranges from 0.09% to 0.13%. - Authorization Fee → Acquiring Bank
A small fee charged per transaction—approved or declined—paid to the bank that provides your merchant account (e.g., $0.05 per transaction). - Markup → Payment Processor + Independent Merchant Service Provider (e.g., Paystone, Elavon, Fiserv, or Global Payments)
This is the amount your payment processor earns for providing the service and infrastructure to process payments.
Example: Breaking Down a $100 Sale
Let’s say a customer makes a $100 purchase at your store using a Visa Infinite credit card processed through Elavon. Under an Interchange Plus pricing model, here’s how the processing fees might look:
Interchange Fee: $1.57
Assessment Fee: $0.10
Authorization Fee: $0.05
Processor Markup: $0.25
Total Fees: $1.97
Your Net Revenue: $98.03
Note: These numbers are approximate and can vary based on your merchant agreement, card type, and transaction method.
The good news? You don’t need to pay each party individually. Your merchant services provider (your payment processor) collects the total fees and distributes them behind the scenes. All you’ll see on your monthly statement is the total processing cost, along with a breakdown if you're on Interchange Plus pricing.
Understanding these components helps you evaluate your rates more clearly and see how much your processor is actually earning—versus what’s going to the banks and card networks.
Payment processing fees can seem confusing, but with the Interchange Plus model, you get full transparency into where your money is going. Knowing this helps you make smarter decisions when comparing providers or negotiating your rates.
Still have questions about what’s on your statement? Or curious if you're paying too much? We’re here to help.