You Paid $100. The Merchant Kept $96.80. Here Is Who Took the Rest

You paid $100. The merchant kept $96.80. Here is who took the rest.

Ask most people who charges the “swipe fee” and they will say Visa or Mastercard. The numbers tell a different story.

The Split on a $100 Purchase

On a $100 online purchase with a US consumer rewards credit card, the merchant pays roughly $3.20 to accept it. The split is not what most people picture:

• $2.20 goes to the issuing bank as interchange. That is your customer’s own bank, taking 69% of the fee. It is what funds their points, their cashback and their lounge access.
• $0.16 goes to Visa or Mastercard as network assessments. Five percent. The names everyone blames take the smallest slice of the three.
• $0.84 goes to the processor and acquirer as markup. That is the only line that is really negotiable on a phone call.

The exact figures vary by card type, merchant category and whether the card is present, but the shape holds for most US credit card transactions. Interchange rates here are based on Mastercard’s 2026-2027 US interchange program, effective April 2026.

Interchange Is Not a Network Fee

Interchange is a transfer from merchants to issuers. The networks set the rate tables, but the money is banked by the institution sitting in your customer’s pocket. Once you see it that way, the rewards arms race and the merchant fee line stop being two separate stories. Premium rewards cards carry higher interchange because the issuer uses that revenue to pay for the rewards.

It also explains why merchants, networks and issuers argue about fees the way they do. I cover the full picture, including debit and regulated rates, in Payment Processing Fees: Who Gets Paid and How Much.

Where Merchants Can Actually Push

The network line: 16 cents

Arguing with the networks moves very little. Network fees are largely fixed schedules, and a merchant has limited leverage unless it is one of the very largest.

The markup line: 84 cents

Renegotiating processor markup is the obvious move, and most merchants do it every year. Pricing model matters: interchange-plus pricing shows exactly what the processor keeps, while blended pricing hides it.

The interchange line: $2.20

Getting transactions to qualify for a better interchange category moves the biggest number, and that is where the real money is. Merchants cannot negotiate the rate tables, but they can control which category each transaction lands in:

• Pass complete data. Address verification, CVV, and for business cards, Level 2 and Level 3 data such as tax amount and line items.
• Settle on time. Late settlement can push a transaction into a more expensive category.
• Use the right merchant category code. The MCC affects which rate program applies.
• Authenticate where it pays. Some programs price authenticated transactions differently.
• Route debit carefully. In the US, eligible debit can be routed to lower-cost networks.

The authorization work I ran, which lifted approvals by 6% and drove roughly $100M in annual revenue, lived in exactly this layer: the data and routing decisions that decide how a transaction is treated by the issuer. For the approval side of the same work, see my authorization rate optimization guide.

The Blind Spot

Most merchants audit the 26% every year and never once look at the 69%. The markup line is visible on the statement and easy to benchmark. Interchange qualification needs someone to dig into category-level reports and fix data and process issues. That is less glamorous, and often worth more.

Which line on your statement have you actually touched in the last twelve months: the markup, or the interchange qualification?

Source: Mastercard 2026-2027 US Region Interchange Programs and Rates, effective April 2026.

FAQ

Who gets the biggest part of the card processing fee?

The card issuer. On a $100 US online purchase with a consumer rewards credit card, roughly $2.20 of the $3.20 total fee is interchange paid to the issuing bank.

How much do Visa and Mastercard earn per transaction?

Network assessments and fees are a small part of the total, around $0.16 on a $100 purchase in this example, or about 5% of the merchant’s cost.

Can merchants lower interchange?

Merchants cannot negotiate interchange rates directly, but they can influence which interchange category a transaction qualifies for by passing complete data (such as AVS, Level 2 and Level 3 data), settling on time, using the correct merchant category and authenticating where it earns a better rate.

A shorter version of this analysis was first published on LinkedIn on July 28, 2026.

Related Reading

• Payment Processing Fees in 2026: Who Gets Paid and How Much
• Authorization Rate Optimization: A Payments PM’s Complete Guide
• How to Choose a Payment Processor: A Framework from a Senior Payments PM
• Main Players in Payment Processing