Network Fee Optimization Isn't Optional Anymore. Here's What the Best Issuers and Acquirers Are Doing. (Part 3 of 3)
In Part 1 of this series, I covered the RBA's proposed interchange reforms and what they mean for the Australian market.
In Part 2, I looked at the network fee (scheme fee) growth trend and the waterbed effect, with Australia's 11% year-over-year network fee increase as one data point in a broader pattern: network fees rising faster than underlying transaction growth and transaction value across multiple regulated markets.
This final piece is about what to actually do about it.
This is a practical playbook for issuers and acquirers trying to control Visa and Mastercard network fees (scheme fees) as interchange pressure increases.
I've spent my career in card network economics and compliance, first at American Express, then at Visa, and now running Consulting Resource Group (CRG), where we work with issuers, acquirers, and BIN sponsors globally on card profit optimization through our CardTraq payment economics practice.
Before I get into tactics, here's the fastest way to tell if you're exposed.
The single most consistent observation I can share is this:
Organizations that actively manage Visa and Mastercard network fee exposure outperform the ones that treat it as a fixed cost. Every time.
That might sound obvious. But the gap between "we know network fees are a problem" and "we have a disciplined process for managing them" is enormous in most organizations.
Here's a simple readiness test:
Can you clearly explain what you are paying Visa and Mastercard in network fees (scheme fees), and what is driving those costs?
If not, you are not alone. And the opportunity is usually larger than expected once the drivers become visible.
Why are Visa and Mastercard network fees (scheme fees) so hard to manage?
Start with the basics.
Network fees are not one fee. They are a catalog of thousands of individual fee codes assessed using different drivers, including:
Per-transaction fixed fees (tied to authorization or processing events)
Percentage-based fees (tied to transaction value)
Program-level fees (assessed across a portfolio or program)
Optional services (enabled by enrollment and billed until cancelled)
Behavior or risk-linked fees (triggered by patterns, thresholds, or program participation)
Fee schedules change multiple times per year. New fees get introduced, existing fees get restructured, thresholds shift, and qualifying criteria evolve.
And this is important: network fees behave fundamentally differently than interchange. Interchange is governed through published rate tables, relatively stable qualification criteria, and long-established ownership within finance and payments teams. While complex, interchange behavior is widely understood.
Network fees (scheme fees) are fragmented, program-driven, and sensitive to enrollment and operational behavior. They require ongoing governance rather than static rate management. Even professionals who spend their entire careers in payments regularly encounter new or unfamiliar fees appearing on invoices.
No single individual or team can realistically maintain comprehensive knowledge of all fee types, programs, and regional variations. That's why organizations that rely on interchange-style governance for network fees often experience unexplained cost growth, even when volumes, products, and programs remain stable.
Why network fee visibility breaks down
Most institutions perform a high-level review of network invoices and then pay them. The review is typically focused on confirming totals and broad month-over-month changes, not on understanding what is driving the underlying fees.
This approach breaks down for three reasons:
Fee structures are difficult to interpret. Network invoices are often technically correct (though errors happen) but operationally hard to understand. Fee names, assessment logic, and grouping conventions rarely make it clear what activity or behavior triggered a given charge. Teams can see that costs increased, but struggle to explain what changed.
Ownership is distributed. Finance reviews and pays the invoice. Operations experiences the workflow impact. Compliance tracks rule changes. Product and engineering implement updates. Because responsibility is spread across teams, no single owner has end-to-end visibility.
Fee catalogs evolve continuously. New optional services are introduced, often enabled as "on" by default as part of broader network programs. Program requirements change and fee logic is refined over time. Without a repeatable governance model, costs tend to drift upward even in well-run institutions.
The result is predictable: under-allocation and incomplete pass-through of network fees, optional services that remain enabled indefinitely, rising cost per dollar processed without a clear explanation, and margin leakage that compounds over time.
The best issuers treat network fee optimization as an operating discipline
Top-performing issuers and acquirers don't treat this as a one-time project. They treat it like an operational discipline with repeatable controls.
Here's what they consistently do differently:
They build event-level visibility, measured in unit economics. Aggregate reporting tells you network fees went up. Event-level visibility tells you why: a fee schedule change, a mix shift (more cross-border, more CNP, more commercial), a new fee category hitting the portfolio, or a billing discrepancy. Critically, they measure network fees in basis points and per-transaction terms, not just absolute dollars. Viewing fees through these unit-economic lenses makes it possible to compare portfolios, track trends, and separate volume-driven growth from fee-driven growth. You can't manage what you can't see, and invoice totals hide more than they reveal.
They invest in tooling that can handle the data volume. This sounds basic, but it's where most organizations stall. A single month's Visa or Mastercard invoice can contain thousands of line items across fee types, programs, regions, and transaction categories. Most institutions try to manage this in spreadsheets maintained by finance or operations teams, supplemented by subject-matter experts embedded in specific functions. That approach breaks at scale. The fee data needs to be aggregated, normalized, and structured so it can be trended over time, compared across portfolios, and broken down by driver. Without a purpose-built tool or platform to do that consistently, every other discipline on this list (bulletin tracking, allocation, optional service review, negotiation) is either manual, incomplete, or both. The institutions that get this right don't spend their time building spreadsheets. They spend their time reading what the data is telling them.
They distinguish required fees from optional services. This is one of the highest-leverage moves and one of the most commonly missed. Visa and Mastercard fee catalogs include optional reports, tools, analytics, and service subscriptions that are not required for basic processing. These are a frequent source of avoidable cost because they may be enabled for a specific purpose and never revalidated. Organizations with good governance regularly audit which optional services are active, whether they still match the business need, and whether they were enabled as "on" by default as part of a broader network program without anyone explicitly opting in.
They track network bulletins and fee changes proactively. Every Visa and Mastercard bulletin that introduces a new fee, modifies an existing one, or changes qualifying criteria has a direct P&L impact. The organizations that catch these early and model the impact before the effective date have time to adjust. The ones that discover it three months later in their invoice don't. Just as important: when institutions don't have a detailed understanding of what they're paying, they are less likely to identify new or changing fees in time to price them appropriately. New network fees are frequently absorbed as cost rather than intentionally passed through to clients or merchants.
They build defensible allocation and pass-through frameworks. Network fees need to be accurately allocated across products, programs, and client portfolios, and consistently recovered downstream. Without this, every fee increase creates basis-point leakage that compounds over time. The best organizations establish clear rules for which fees are client-driven versus shared across programs, and maintain pass-through models that update as fee structures evolve.
They negotiate from a position of knowledge. Issuers and acquirers negotiate with the networks on incentives, rebates, and fee structures. Those negotiations go better when you can demonstrate exactly what you're paying, how it compares to benchmarks, and where the specific pain points are. Showing up with aggregate data and a general sense that fees are too high is a very different conversation than showing up with a transaction-level analysis that identifies specific fee categories where you're overpaying relative to your peers.
They assign a single accountable owner. Network fee governance is inherently cross-functional. Finance reviews and pays the invoice. Operations experiences the workflow impact. Compliance tracks rule changes. Product and engineering implement updates. But effective governance requires a clear point of accountability. High-performing institutions assign one owner for network fee economics, supported by inputs from those teams. Ownership doesn't mean one team controls everything. It means someone is responsible for understanding how network fees are generated, how they change, and how they are allocated and recovered across the business. Without that accountability, network fees tend to become nobody's problem, until margins are already under pressure.
In practice, when institutions take a structured look at their network fees for the first time, they typically identify 7-15% in potential cost-out opportunities, driven primarily by optional services that remain enabled indefinitely, gaps in governance or best-practice adoption, incomplete pass-through and allocation, and in some instances, misapplied or avoidable charges.
A practical starting point: the 30-minute monthly review
Most institutions don't need to audit every line item on a network fee invoice each month. What they need is signal: what changed, and is it controllable?
A structured 30-minute review, repeated monthly, is often very effective because it builds pattern recognition over time and surfaces issues before they compound.
Minutes 0-5: Start with variance, not detail. Compare the current month to the prior month. Flag any fee line that moved more than 5-10% or that appears for the first time. The goal is not to explain everything. It's to identify what moved.
Minutes 5-15: Sort changes into three buckets.
Expected: driven by volume or mix changes that align with business activity
Controllable: tied to optional services, best-practice gaps, or avoidable penalties
Abnormal: errors, one-offs, or anything that cannot be immediately explained
If a change cannot be placed into a bucket, it becomes the priority for follow-up.
Minutes 15-25: Run three high-leverage checks.
Optional services that were not explicitly renewed or revalidated
Penalties or behavioral fees that indicate a process or compliance breakdown
Charges that appeared in the prior month and are still present
If a charge repeats for two consecutive cycles, it is no longer an exception. It needs an owner.
Minutes 25-30: Summarize the story. The review should produce a single summary statement that attributes the month's movement to its primary drivers.
This routine works because it starts with variance rather than volume. Institutions that can explain their network fee movement cleanly each month are in a fundamentally stronger position to govern costs, allocate accurately, and respond to network program changes before they become embedded.
If fees surprise you, you have an invoice, not a model.
When network fee data goes public, can you explain your numbers?
This is the part most organizations haven't thought through yet.
In Australia, the RBA's proposed transparency requirements would mandate that card networks publish aggregate network fee data quarterly and justify any fee increases that outpace transaction value growth. Separately, large acquirers would need to publish their merchants' average cost of acceptance broken down by card type and merchant size.
That changes the dynamic for everyone.
For acquirers, when both network fee data and merchant cost-of-acceptance data are public, merchants can see whether lower wholesale costs are actually flowing through to pricing. Acquirers who can't clearly trace the relationship between what they pay and what they charge will face uncomfortable questions about their margins, from merchants who now have a public reference point for what wholesale costs should look like.
For issuers, the exposure is different. Once regulators publish aggregate network fee data, your board, your finance team, and your network relationship managers all have a public benchmark to compare against. If the published data shows network fees growing at one rate and your internal reporting shows a different trajectory, someone will ask why.
In both cases, the ability to explain your network fee exposure accurately, at a granular level, moves from something that's useful to something that's expected.
The RBA is on track to be the first regulator to build this level of mandatory network fee transparency. As the EU, UK, and other jurisdictions move in a similar direction, the organizations that already have the data structured and the answers ready will be in a fundamentally stronger position than the ones scrambling to build it after the numbers go public.
How does CardTraq help with network fee (scheme fee) optimization?
This is what we built CardTraq to do.
CardTraq is our payment economics practice developed in partnership with Pinnacle Payment Economics in the UK, which includes a cloud-based network fee tracking platform. Our clients include some of the largest global issuers, acquirers, and BIN sponsors, across Europe, the Americas, Australia, and the broader APAC region.
The platform does three things:
Aggregates and normalizes network fee data at scale. It ingests monthly network invoices and volumetrics from multiple networks, lines of business, and markets into a single secure environment. No integration required. That means thousands of invoice line items that would otherwise live in spreadsheets become structured, trendable, and comparable, across networks, across portfolios, and over time.
Makes network fee economics visible and actionable. Users can track and analyze invoice data, identify new fees and compliance fines, monitor transaction economics, compare costs like-for-like across networks, and set up customizable watchlists that flag changes automatically.
Supports forecasting, budgeting, and cost recovery. Granular data means better forecasts. The platform separates fixed and variable fee components, tracks unit transaction costs over time, and produces reports and extracts including GL population, so network fees can be accurately allocated and recovered downstream.
For organizations that want to start with a structured assessment before committing to an ongoing platform, we also offer a CardTraq Network Fee Review, a consulting engagement where our team analyzes your current Visa and Mastercard network fee invoices, identifies cost-out opportunities, and delivers a clear picture of what you're paying, what's driving it, and where the actionable savings are. Most organizations that go through the review identify the 7-15% potential cost-out opportunity I referenced earlier. It's also the fastest way to determine whether ongoing platform-based tracking makes sense for your portfolio.
Why now is the right time to focus on network fee management
The math is simple. Interchange revenue is being compressed across every major regulated market. At the same time, network fees are growing, in Australia's case at 11% year-over-year, and our own client data shows approximately a 30% increase in unit costs over the last five years. That's margin pressure from both sides.
Most issuers and acquirers have already optimized the obvious levers. Interchange strategies are mature. Processing contracts get renegotiated regularly. Product pricing gets reviewed quarterly. But network (scheme) fees? In most organizations, they're still treated as a cost of doing business rather than a cost to be managed.
That's where the opportunity is.
Network fees are often the largest remaining controllable cost line that hasn't been subjected to the same rigor as interchange or processing. The organizations that recognize this and build the visibility and governance to act on it are finding real margin, not by growing revenue, but by stopping leakage they didn't know they had.
If your card program economics are under pressure and you've already pulled the obvious levers, network fees are where you should be looking next.
Getting started
If any of this resonates, I'm happy to have a conversation about what network fee optimization could look like for your organization.
For a deeper dive into the operational framework covered in this article, we've published a detailed guide: "Card Network (Scheme) Fees Explained: What They Are, How They're Assessed, and Why They Keep Rising."Available at https://www.cardtraq.com/network-fee-explainer.
You can DM directly here on LinkedIn.
Steven Leitman is Managing Partner and CEO of Consulting Resource Group, a boutique payments consultancy specializing in card network fee optimization for issuers, acquirers and ISOs. Through our CardTraq capabilities, we help issuers and acquirers globally optimize profitability.