Key takeaways
- Card acceptance costs combine interchange, scheme fees and the acquirer's margin.
- Bank payments don't use card networks, so the cost structure is different.
- Compare total costs, including failed payments and disputes, not just headline fees.
Every payment method has a cost. Understanding where that cost comes from helps businesses choose the right mix of methods, and explains why many are adding bank payments to their checkout.
Where card costs come from
When a customer pays by card, the merchant's total fee is usually made up of several parts:
- Interchange, paid to the card issuer. In the EU, interchange on consumer cards is capped at 0.2% for debit and 0.3% for credit, but other card types and cross-border cards can cost more.
- Scheme fees, charged by the card networks.
- The acquirer's or PSP's margin for processing the payment.
Many of these fees are a percentage of the transaction, so they grow with the basket size.
How bank payments differ
A Pay by Bank payment moves money from one bank account to another without a card network. There is no interchange and no scheme fee. The cost usually comes from the payment provider's fee for initiating the payment and handling the bank connection, and it's often priced differently, sometimes as a flat fee per transaction.
The bigger the basket, the more the cost model of the payment method matters.
Look at the total cost
Headline fees only tell part of the story. A fair comparison includes:
- Failed payments caused by expired, blocked or mistyped card details.
- Disputes and chargebacks, and the time spent handling them.
- Settlement speed and its effect on cash flow.
- Reconciliation effort for each method.
Choosing the right mix
For many businesses the answer isn't one method or the other. Cards and wallets stay important, while bank payments take on the use cases where they're the better fit, such as large orders, top-ups and invoices.