Payments glossary · Fees
Scheme Fee
Scheme fees are charges set by card networks such as Visa and Mastercard for using their networks. Acquirers pay them and usually pass them on to merchants, either inside a blended rate or as a separate line on the statement.
How Scheme Fee works
Unlike interchange, which goes to the issuer, scheme fees are the network's own revenue. They are made up of many individual charges: fees per authorisation, clearing and settlement message, assessment fees based on volume, extra fees when the card and the merchant are in different countries or regions, currency conversion fees, and charges for particular services or for breaking scheme rules, such as retrying declined transactions too often.
Scheme fees are generally smaller than interchange but are complex, with many separate charges that few merchants can check line by line. The EU Interchange Fee Regulation, retained in the UK, requires acquirers to show scheme fees separately in merchant agreements unless the merchant asks for blended pricing, which is what makes interchange++ pricing possible.
When comparing offers, ask whether scheme fees are passed through at cost or marked up, and whether cross-border and currency fees are included in the quoted rate. Merchants with many foreign cardholders feel scheme fees most, because cross-border transactions attract additional network charges on top of any higher interchange.