Scheme Fees KPI

Scheme Fees

The Scheme Fees KPI tracks the aggregate fees imposed by card schemes like Visa, Mastercard, and Discover for operating and processing transactions on their payment networks. These fees are a combination of fixed fees, determined by the card scheme services used and the volume of transactions processed, and variable fees, calculated at the transaction level based on factors such as card type (e.g., credit, debit, prepaid), payment method (e.g., contactless, online), and the transaction’s country of origin. For example, a merchant processing 10,000 transactions monthly might incur fixed fees for network access and variable fees of 0.1% per international transaction. Additionally, schemes may impose penalties for non-compliance, such as untimely transaction authorizations or fraudulent network usage, which issuers and acquirers may pass on to program managers or merchants.

This KPI is critical for merchants and issuers as it directly affects operational costs and profitability. High scheme fees can erode margins, particularly for high-volume or cross-border transactions, prompting merchants to negotiate better terms with acquirers or optimize transaction routing. For issuers, fees are often based on quarterly reports (e.g., Visa’s QOC or Mastercard’s QMR), with discrepancies in reporting—such as misclassified domestic versus international transactions—potentially increasing costs.