International case studies: network fee reviews, tracking, cost allocation and interchange
Ten results from international engagements with issuers, acquirers, BIN sponsors and fintechs. Outside the US, network fees are usually called scheme fees. Five network fee reviews found savings of 11-22%, network fee tracking and cost allocation added more, and an interchange review saved $2.5M a year.
Network fee reviews
Case study 09
Prepaid card issuer operating in four markets
A private-equity-owned issuer of Mastercard prepaid cards operating in the US, Australia, the UK and Ireland identified $4M a year in recurring network fee savings, an 18% reduction and above the typical 7-15% range.
| Client type | Prepaid card issuer |
|---|---|
| Markets | US, Australia, UK and Ireland |
| Network | Mastercard |
| Potential savings | $4M a year, recurring |
| Recurring cost savings | 18% |
| Billing anomalies found | 27 |
| Cost-saving opportunities | 209 |
Programs that span several markets are billed under different fee schedules and rules in each region, which makes unused services and billing errors harder to spot from any single invoice.
Case study 10
Global payments company with issuing on multiple continents
A NASDAQ-listed global payments company with card issuing businesses on multiple continents identified $1.5M a year in recurring network fee savings, a 12% reduction.
| Client type | Multi-product card issuer |
|---|---|
| Markets | Multiple continents |
| Potential savings | $1.5M a year, recurring |
| Recurring cost savings | 12% |
| Billing anomalies found | 8 |
| Cost-saving opportunities | 24 |
Even with comparatively few billing anomalies, a 12% reduction sits squarely within the typical 7-15% range, which shows how much of the opportunity usually comes from services and set-up rather than errors.
Case study 11
European commercial card fintech
A European issuer of commercial cards across multiple markets identified $1.1M a year in recurring network fee (scheme fee) savings, a 22% reduction and well above the typical 7-15% range.
| Client type | Commercial card issuer (fintech) |
|---|---|
| Markets | Europe, multiple markets |
| Potential savings | $1.1M a year, recurring |
| Recurring cost savings | 22% |
| Billing anomalies found | 19 |
| Cost-saving opportunities | 21 |
Nineteen billing anomalies meant core billing didn't fully tie out. Fast-growing programs that add markets quickly often find their fee reconciliation hasn't kept pace.
Case study 12
Top 10 global acquirer
A top 10 acquirer operating across the Americas, Europe and Asia Pacific identified more than $50M a year in recurring network fee savings, an 11% reduction.
| Client type | Acquirer |
|---|---|
| Markets | Americas, Europe and Asia Pacific |
| Potential savings | More than $50M a year, recurring |
| Recurring cost savings | 11% |
| Billing anomalies found | 20+ |
| Cost-saving opportunities | 200+ |
At this scale, a reduction within the typical range is worth more than $50M a year, and the volume of anomalies and opportunities reflects how many fee lines a global acquirer carries.
Case study 13
European acquiring and issuing group saves $7.1M a year
A sizable European group with acquiring and issuing businesses across multiple markets and subsidiaries wanted to cut network fees quickly to improve profitability and enterprise value. The review delivered $7.1M a year in realized savings, 22% lower than before the engagement.
| Client type | Acquiring and issuing group |
|---|---|
| Markets | Europe, multiple markets and subsidiaries |
| Service | Network fee review |
| Savings realized | $7.1M a year |
| Change vs before the engagement | 22% lower |
For a group with several subsidiaries, one review covers every entity's billing at once, so savings can be captured across the group rather than one business at a time.
Network fee tracking
Case study 14
Tracking after a review: 77% of identified savings realized
After a network fee review, a client wanted to make sure the identified savings were actually captured, and to stay on top of penalties and non-compliance fees, new fees and adverse fee changes. It also wanted one global view of its fees for its finance and commercial teams. With ongoing network fee tracking, it realized 77% of the savings identified.
| Client type | Network fee review client |
|---|---|
| Markets | Multiple markets |
| Service | Network fee tracking |
| Result | 77% of identified savings realized |
Identified savings only count once they're captured. 77% is at the top of the 40-80% that clients typically realize.
Case study 15
Tracking catches new reporting fees, saving $0.8M a year
A card network introduced several new reporting fees and automatically opted all clients in at short notice. Network fee tracking flagged the new charges, and the client opted out promptly, saving $0.8M a year.
| Client type | Network fee tracking client |
|---|---|
| Markets | International |
| Service | Network fee tracking |
| Savings realized | $0.8M a year |
Networks change fees and add services throughout the year, sometimes with little notice. Without tracking, new charges like these can run for months before anyone spots them.
Cost allocation
Case study 16
BIN sponsor lifts fee recovery from 67% to more than 98%
A BIN sponsor was under-recovering network fees from its program clients. After moving to the cost allocation service, recovery rose from 67% to more than 98%, worth $3.2M a year.
| Client type | BIN sponsor |
|---|---|
| Markets | International |
| Service | Cost allocation service |
| Fee recovery | 67% before, more than 98% after |
| Savings realized | $3.2M a year |
Case study 08 shows a similar result in North America, where a BIN sponsor went from 44% to 95% recovery with a new allocation model.
Case study 17
B2B virtual card issuer recovers $2.9M a year more in network fees
A B2B issuer of virtual cards wasn't accurately reflecting network fee pass-through pricing in its client billing. The cost allocation service corrected it, adding $2.9M a year in fee recovery.
| Client type | B2B virtual card issuer |
|---|---|
| Markets | International |
| Service | Cost allocation service |
| Result | $2.9M a year more in fee recovery |
When client pricing is meant to pass network fees through, any gap between the fees billed and the fees passed on comes straight out of the issuer's margin.
Interchange review
Case study 18
European acquirer saves $2.5M a year on interchange
A leading European acquirer was unsure whether it was following Visa and Mastercard interchange rules closely enough to get the best available rates. The interchange review validated its interchange levels and found savings by reclassifying merchants and fixing the causes of downgrades, worth $2.5M a year, 11% lower than before the engagement.
| Client type | Acquirer |
|---|---|
| Markets | Europe |
| Service | Interchange review |
| Savings realized | $2.5M a year |
| Change vs before the engagement | 11% lower |
Interchange qualification depends on how merchants are set up and what data each transaction carries, so misclassified merchants and downgrades can go unnoticed. Case study 07 shows a US ISO's interchange review.
Questions and answers
How much can international issuers and acquirers save on network fees?
In these five network fee reviews, savings ranged from 11% to 22%, worth from $1.1M a year to more than $50M a year.
Are scheme fees the same as network fees?
Yes. Scheme fees is the term used in the UK, Europe, Australia and elsewhere for the same Visa and Mastercard charges called network fees in the US.
Does tracking network fees after a review make a difference?
Yes, a big one. Network fees change all the time, so ongoing monitoring is critical to keep savings from slipping away. In one case, a client realized 77% of the savings identified in its review by tracking fees afterward. In another, tracking caught new reporting fees a network had opted all clients into at short notice, saving $0.8M a year.
How much can a BIN sponsor improve network fee recovery?
One BIN sponsor raised recovery from 67% to more than 98%, worth $3.2M a year. Case study 08 shows another going from 44% to 95%.
Case studies 09-12 show recurring savings identified in each review. Case studies 13-18 show results as reported for each engagement.
Most programs we review are paying network fees they don't need to. A review takes 4-6 weeks and needs only your network invoices and volume reports.
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