Written by Modulr | Jul 24, 2025 11:00:00 PM
Card networks or Schemes such as Visa, Mastercard, and American Express facilitate the authorisation, clearing, and settlement of card transactions between merchants and banks. These networks set interchange fees, security standards, and global acceptance policies. Card scheme fees are the fees paid by acquirers to be members of the schemes when taking card payments. Acquirers pass these costs on to their merchants. The merchant discount fee, called more correctly the merchant service fee, is the total fee a merchant pays per card transaction to accept a card payment. A cut taken rather than discount given, it is usually expressed as a percentage of the transaction amount, and it covers the cost of processing card payments through the card networks (such as Visa or Mastercard). Fees differ significantly between card-present (CP) and card-not-present (CNP) transactions, due to the perceived higher risk and lower authentication strength in CNP, as well as additional operational costs around tokenisation, risk scoring and anti-fraud measures.