Scheme fee

A scheme fee, also known as a card scheme fee, is a charge levied by card networks or schemes—such as Visa, MasterCard, American Express, and Discover—on each transaction processed using their cards. This fee is paid by the acquiring bank (or acquirer), which is the bank that processes credit or debit card transactions on behalf of a merchant.

The scheme fee is separate from and in addition to the interchange fee, which is a fee paid by the acquirer to the card issuer (the bank that issued the card to the consumer). While interchange fees are meant to cover the costs and risks associated with approving a credit or debit transaction, scheme fees are charged by the card networks to cover operational costs such as network maintenance, development, fraud prevention, and marketing.

The amount of the scheme fee can vary depending on several factors, including the type of card used (credit or debit), the card brand, the merchant's industry, and the region in which the transaction occurs. These fees are typically set as a small percentage of the transaction amount, and they can also include a fixed component per transaction.

Scheme fees are part of the broader cost structure that merchants must consider when accepting card payments. They contribute to the total cost of card acceptance, impacting the overall fees that merchants pay to process electronic payments. These fees help sustain the infrastructure that enables secure, efficient, and widespread use of payment cards globally.