Scheme fees explained: what Visa and Mastercard charge and who passes it on

Part of Fees and pricing models. Start with the main guide: Interchange plus vs blended vs flat rate: which pricing model costs less?

If interchange is the fee that goes to the customer's bank, scheme fees are the fee that goes to the network in the middle. Visa and Mastercard, and the other card networks, run the rails that carry a payment from the shop to the customer's bank and back. They charge for that service on every payment, and your provider passes the cost on.

Scheme fees are the part of the bill most people have never heard of. They sit beside interchange and the provider's markup in the three-part cost of a card payment. This guide explains what they are, how they are charged, how they appear on a statement and what you can and cannot do about them.

Where do scheme fees fit in a card payment?

Every card payment carries three layers of cost.

On an interchange plus statement you will see these three as separate sections. On other statements they are rolled into a single rate, which is why many businesses have never seen a scheme fee line at all. Our guide to interchange plus, blended and flat rate pricing explains how each pricing model shows them.

What are the main types of scheme fee?

Card networks publish long fee schedules, and the names differ between them. For a merchant, most of them fall into a few types.

Most merchants will mainly see the first two. For a typical in-person business, scheme fees are an assessment percentage plus a small per-transaction charge. For businesses taking international or online payments, the extras add up.

What do scheme fees cost in practice?

Scheme fees are usually smaller than interchange, and the exact amounts depend on the network, the card type and the business. As an example, take a business with £20,000 of card turnover across 800 transactions. Assume scheme fees of 0.10% plus 2p per transaction, which are illustrative figures and not a published rate.

• Assessment: 0.10% × £20,000 = £20.00
• Per-transaction: 800 × £0.02 = £16.00
• Total scheme fees: £36.00, or 0.18% of turnover

Compare that with the other layers in the same month, using the same example.

Here scheme fees are about 21% of the bill, interchange about 42% and the provider's markup about 37%. The proportions shift with the card mix. A business that takes many international cards will have higher scheme fees. One that takes mostly domestic debit will have lower interchange and a larger share going to the markup.

How do scheme fees appear on a statement?

Where you find them depends on the pricing model.

On an interchange plus statement

You will usually see a section headed "scheme fees", "assessments" or "network fees". Look for lines such as:

• Visa assessment or Visa network fee
• Mastercard assessment or Mastercard network fee
• Per-transaction processing charges for each network
• Cross-border or international fees

Each line may show a rate and an amount, or just an amount. If only the amount is shown, divide it by the turnover for that network to find the effective percentage. Our guide to working out a missing rate, turnover or fee shows the calculation.

On a blended or flat-rate statement

Scheme fees are not shown. They are included in the single rate. In this case you cannot see what was charged by the network and what was kept by the provider. The headline rate hides the split, which is why interchange plus is considered more transparent.

Common labels

The same fee can carry different names.

• Assessment, brand fee or network fee
• Card scheme fee or scheme access fee
• Authorisation fee or processing fee (the per-transaction part)
• Licence or participation fee

If a line is not clear, ask your provider what it is, who it is paid to and whether it is a pass-through cost or part of the provider's own charges. A line labelled "scheme fee" that is much larger than expected may include part of the provider's markup.

Can you negotiate scheme fees?

Not directly. Every acquirer pays the same network fees for the same type of payment, so a provider cannot offer you a lower scheme fee without losing money on it. What you can negotiate is the provider's own markup and fixed charges.

That makes scheme fees useful as a benchmark. If you know that interchange and scheme fees together make up roughly a certain share of a typical bill, you can see how much of your own bill is pass-through cost and how much is the provider's. The bigger the gap between your total rate and the combined pass-through costs, the more room there is for a better offer.

A rough check works like this:

1. Add up the interchange and scheme fees on an interchange plus statement.
2. Subtract them from the total fees.
3. What remains is the provider's markup, plus fixed fees.

In the example above, interchange and scheme fees are £109.00 out of a £173.00 bill, which leaves £64.00 for the markup. See acquirer markup explained for how to judge that figure.

Why do scheme fees vary between merchants?

Two businesses with the same turnover can pay different scheme fees. The main reasons:

• Card mix. Some networks charge more for certain card types.
• International cards. Cross-border payments attract extra fees.
• Online payments. Card-not-present payments often carry extra network charges.
• Average transaction value. Fixed per-transaction fees weigh more on small sales.
• Volume tiers. In some arrangements, the provider's own volume affects the scheme fee, but this is not usually passed on to individual small merchants.

For a business taking many small sales, the per-transaction part is the main driver. A 2p fee on a £5 sale is 0.40%, while on a £100 sale it is 0.02%.

How do scheme fees affect your effective rate?

Scheme fees count towards your effective rate like any other cost. If you are comparing an interchange plus quote with a blended rate, include scheme fees on the interchange plus side, or you will make that quote look cheaper than it is. Our guide to the effective rate shows how to put every cost into one number.

If you are a consultant preparing a quote, treat scheme fees as a pass-through line that is identical on both sides of the comparison for the same card mix. The saving then comes from the markup and the fixed fees. The checkmyrates calculator lets you enter scheme fees as a percentage and a per-transaction amount so you can show the merchant exactly where each pound goes.

Frequently asked questions

What are scheme fees?

They are charges made by card networks such as Visa and Mastercard for using their systems. Your provider pays them and passes them on to you, either as separate lines or inside a blended rate.

What is the difference between scheme fees and interchange?

Interchange goes to the bank that issued the customer's card. Scheme fees go to the card network. Both are pass-through costs, and both are separate from your provider's own markup.

Are scheme fees the same as assessments?

Mostly yes. Assessment is a common name for the percentage-based part of a scheme fee. Some statements also show a separate per-transaction processing fee.

Can I get lower scheme fees by switching provider?

Not on the pass-through part, since every provider pays the same network fees. You can switch to a provider with a lower markup, and some providers include scheme fees in a flat rate that works out cheaper for your sales.

Why are scheme fees higher on international cards?

Cross-border payments involve more parties and a higher fraud risk, so networks charge extra for them. Currency conversion adds a further charge.

How do I find scheme fees on my statement?

On an interchange plus statement, look for a section headed scheme fees, assessments or network fees. On blended and flat-rate statements they are not shown.

Figures in this guide are examples to show the method. Fees, rules and rates change, so check your own statement, contract and current rules before you decide. This is general information, not financial or legal advice.