Authorization economics: scheme fees decoded
The interchange bill is the visible part. What actually shows up on the underlying scheme fee statement is where the interesting rebalancing is happening.
Merchants and their PSPs talk about "interchange" as if it were one number. It never is. What actually appears on the fee statement is a stack of scheme fees — assessments, network fees, cross-border levies, currency conversion, program participation. The proportions of that stack have been quietly rebalancing over the last three years.
Based on statement reviews from 2023–2024; written August 2025.
The pieces
A per-transaction cost, in rough order of magnitude, usually contains:
- Interchange — the largest single component, paid to the issuer.
- Assessment / network fee — paid to the scheme.
- Program participation fees — often bundled, sometimes per-transaction.
- Cross-border and DCC fees — where applicable.
- PSP margin — negotiated separately.
Where the schemes are rebalancing
Interchange rates get regulated in some markets; scheme fees rarely do. The observable pattern since 2022 has been assessments creeping up while headline interchange stays where regulation set it. This isn't a criticism — the schemes are entitled to price their services — but merchants comparing "our interchange is lower this year" without looking at the scheme-fee line will draw a wrong conclusion.
What to look at monthly
- The total network cost, not the interchange component alone.
- The cross-border and DCC share, which grew for many merchants in 2024.
- Program participation fees that are billed monthly rather than per-transaction; those can be renegotiated.
The transparency here is imperfect and the terminology varies by scheme, but the pattern is worth watching.