Card acceptance is quoted as a single rate, which conceals that the money is being divided between several parties. Each one is priced differently and moves for different reasons.
Three components inside one rate
The largest share generally goes to the bank that issued the customer's card. This portion is set by the card network's published schedule and is the same for every merchant.
A smaller share goes to the network itself for operating the scheme, routing the transaction and handling authorisation. This is also set centrally rather than negotiated.
Only the remainder belongs to the acquirer or payment provider that serves the merchant. That is the part competition acts on, and it is the smallest of the three.
Why the card used changes the cost
Interchange schedules distinguish between card types. Consumer debit cards typically sit at the low end, while commercial and premium rewards cards sit considerably higher.
The rewards funded by those premium cards are paid for out of the interchange the merchant bears. A customer choosing a points-earning card raises the cost of that sale.
Cross-border transactions carry higher rates again, because the issuing and acquiring banks are in different markets and additional currency handling applies.
Blended and interchange-plus pricing
A blended quote charges a single rate across all card types, averaging the underlying variation. It is simple to understand and hides which transactions actually cost what.
Interchange-plus pricing passes the scheme costs through at cost and adds a stated margin. The invoice is more complicated and the true cost structure becomes visible.
Which produces a lower total depends on the merchant's card mix. A business serving mostly consumer debit cards usually pays more under an averaged rate.
Risk changes what a merchant is charged
Acquirers price for the possibility that a merchant will fail to deliver after being paid, leaving the acquirer liable for refunds it cannot recover.
Long delivery lead times, subscriptions, travel and high-value goods therefore attract higher rates, delayed settlement or a rolling reserve held against future disputes.
These terms vary by acquirer and by jurisdiction, and regulation of interchange itself differs sharply between markets and changes over time.
The fees that are not in the rate
Beyond the percentage sit fixed charges per transaction, gateway fees, monthly minimums, chargeback handling fees and currency conversion margins.
For low-value baskets the fixed element can exceed the percentage entirely, which is why small-ticket businesses have a different cost profile from the headline rate implies.
Comparing providers on the advertised percentage alone therefore misses much of the cost. The effective rate is total charges divided by total processed volume.