Pricing
Assessment Fee
Definition
Assessment Fee a fee charged by card networks (Visa, Mastercard, Amex) on every transaction for using their network infrastructure and brand. Also called scheme fees or network fees. Assessment fees are typically a small percentage of transaction volume (0.13-0.15% for Visa/Mastercard) plus per-transaction fees. Unlike interchange which goes to issuers, assessments go directly to the card networks.
Related Terms
Interchange Fee
The fee paid by the acquiring bank to the issuing bank each time a card transaction is processed. Set by card networks (Visa, Mastercard), interchange varies based on card type (debit vs credit, rewards vs standard), merchant category code, transaction type (card-present vs card-not-present), and geography. Interchange typically represents the largest component of payment processing costs, ranging from 0.2% for regulated debit to 2%+ for premium rewards cards.
Scheme Fees
Fees charged by card networks (Visa, Mastercard) for various services beyond the basic assessment. Includes authorization fees, clearing fees, cross-border fees, data usage fees, and program fees. Scheme fees have grown significantly in recent years and can add 0.1-0.3% to transaction costs depending on geography and transaction characteristics. Often bundled or passed through as part of IC++ pricing.
Merchant Discount Rate
The total percentage fee a merchant pays for accepting card payments, encompassing interchange, scheme fees, and acquirer markup. Often shortened to MDR. In blended pricing models, this is presented as a single rate (e.g., 2.9%). In IC++ pricing, the components are itemized separately. MDR varies significantly by merchant risk profile, volume, and negotiating power.
See Also
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