Card Network (Scheme) Fees Explained: What They Are, How They’re Assessed, and Why They Keep Rising
This guide explains how Visa and Mastercard network (scheme) fees work, how they are assessed, who pays them, and why they continue to rise faster than payment volumes.
Card network fees, often called scheme fees outside the US and Canada, are one of the fastest-growing cost lines in the payments ecosystem - and one of the least understood.
Visa and Mastercard continue to add fee types, refine assessment logic, and expand optional services across areas like authorization, clearing, security, and digital enablement. For issuers, acquirers, BIN sponsors, ISOs, and fintechs, the result is a complex and shifting cost structure that can be difficult to track, explain, allocate, or fully recover.
A simple readiness test is this:
Can you clearly explain what you are paying Visa and Mastercard in network (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.
What are card network (scheme) fees?
Card network fees (scheme fees) are charges assessed by card networks such as Visa and Mastercard for the use of their payment infrastructure and services. These fees are directly billed to principal members (i.e., issuers and acquirers) and may be passed through to clients or merchants for activities such as:
Authorization message routing and processing
Clearing and settlement enablement
Security and risk programs
Network operations and data services
Cross-border and regional enablement
Optional reports, tools, and add-on services
Network (scheme) fees vs interchange vs processing fees
Card payment costs are often discussed as a single category, but in practice they consist of distinct fee types with different economics and governance characteristics.
Network (scheme) fees tend to be fragmented, program-driven, and sensitive to enrollment and operational behavior, requiring ongoing governance rather than static rate management.
Interchange fees are administered by the network and flow between the acquiring and issuing banks on each transaction. They vary primarily by card type, transaction method, and risk profile, and follow published rate structures.
Processing and processor fees are contract-based charges for technology, connectivity, and operational services, typically governed through commercial agreements rather than network rules.
All three affect payments profitability, but they behave differently over time. Network (scheme) fees, in particular, require a distinct governance approach because they evolve incrementally and are influenced by operational decisions across the organization.
Who pays network (scheme) fees?
Visa and Mastercard generally bill network (scheme) fees directly to principal members, namely issuers and acquirers. In BIN-sponsored and fintech program models, these fees are billed to the sponsoring principal, even when the underlying activity is driven by individual programs or fintech partners.
Depending on the program structure, the underlying fintech or BIN sponsoree may receive network fee invoices or reporting either directly from the network or passed through by the BIN sponsor, with levels of detail that vary significantly by sponsor, processor, and agreement.
Merchants typically do not receive invoices from the networks. They may bear some network costs indirectly through their acquiring pricing model, but the network fee assessments themselves are made at the issuer and acquirer layer.
How Visa and Mastercard Network (Scheme) Fees Are Assessed
Network (scheme) fees are not one fee. They are a catalog of 10’s of thousands of fees assessed using different drivers, often including a mix of:
Per-transaction fixed fees (often tied to authorization or processing events)
Percentage-based fees (often 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)
Common fee drivers include:
Transaction volume and value
Authorization volume (including declines)
Card-present vs e-commerce mix
Tokenized and digital wallet activity
Geographic and cross-border mix
Participation in monitoring or security programs
Enrollment in optional network services and reports
Accuracy note: The exact fee names, thresholds, and calculations vary by network, region, and program. The reliable takeaway is that network (scheme) fees are multi-driver assessments, not a single rate.
How network (scheme) fees are measured
Network (scheme) fees are typically measured in a combination of absolute dollars, per-transaction fees, and basis points relative to processed volume. Many organizations focus on invoice totals, but more meaningful analysis looks at network fee yield and cost per dollar processed over time.
Viewing network fees through these unit-economic lenses makes it easier to compare portfolios, track trends, and identify changes driven by behavior, enrollment, or network program evolution.
Core categories of network (scheme) fees
Most Visa and Mastercard network (scheme) fee catalogs include fees that map to these operational categories:
Authorization and processing fees
Fees tied to routing and processing authorization messages, including certain types of declines and other authorization events.
Assessment-style fees
Fees often assessed as a percentage of transaction value, reflecting broad network usage and operations.
Digital enablement and tokenization-related fees
Fees associated with digital credentials and tokenized payments, including wallet-driven activity, depending on network rules and program structures.
Cross-border and regional fees
Fees assessed when the issuer and merchant are in different countries or regions, or where special routing or regional frameworks apply.
Monitoring, security, and compliance-related fees
Fees related to network programs, security requirements, or monitoring frameworks. The specifics vary, but the operational pattern is consistent: rules and programs evolve, and fees follow.
Optional network (scheme) services
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.
Why Visa and Mastercard Network (Scheme) Fee Visibility Breaks Down
Most institutions perform a high-level review of network (scheme) 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.
In practice, network (scheme) fee management often relies on:
Network invoices
Spreadsheets maintained by finance or operations teams
Subject-matter experts embedded in specific functions or teams
This approach typically breaks down for three reasons.
1) Fee structures are difficult to interpret
Network (scheme) 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. As a result, teams can see that costs increased, but struggle to explain what changed or which levers, if any, are available to influence them.
2) 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 into how network (scheme) fees are generated and controlled.
3) 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 and review model, costs tend to drift upward even in well-run institutions.
An additional consequence is often overlooked. When institutions do not have a detailed understanding of what they are paying in network (scheme) fees, they are also less likely to identify new or changing fees in time to price them appropriately. As a result, new network fees are frequently absorbed as cost rather than intentionally passed through to clients or merchants.
In practice, when institutions take a structured look at their network (scheme) fees, they often identify approximately 10–20% in potential cost-out opportunities, across both large and small portfolios, driven primarily by optional services, gaps in governance or best-practice adoption, and in some instances, misapplied or avoidable charges.
The result is predictable:
Under-allocation and incomplete pass-through of network (scheme) fees
Optional services that remain enabled indefinitely
Rising cost per dollar processed without a clear explanation
Margin leakage that compounds over time
Why network (scheme) fee governance is harder than interchange governance
Many institutions manage interchange effectively but struggle with network (scheme) fees. The reason is structural, not organizational maturity.
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, monitored consistently, and analyzed using familiar unit economics.
Network (scheme) fees are fundamentally different.
They span tens of thousands of individual fee codes that vary by region, program type, transaction behavior, and enrollment status. Fees are introduced incrementally, assessment logic evolves over time, and responsibility for the underlying drivers is distributed across finance, operations, compliance, product, and technology teams.
Compounding this challenge is the reality of expertise. Even professionals who spend their entire careers in payments regularly encounter new or unfamiliar network (scheme) fees appearing on invoices. No single individual or team can realistically maintain comprehensive knowledge of all fee types, programs, and regional variations.
As a result:
· Network (scheme) fees change more frequently than interchange
· Fee drivers are harder to trace back to specific behaviors or decisions
· Governance often lags fee evolution, even in well-run institutions
· Costs accumulate gradually rather than appearing as obvious step changes
This is why organizations that rely on interchange-style governance for network (scheme) fees often experience unexplained cost growth, even when volumes, products, and programs remain stable. Effective governance requires shared institutional knowledge, structured analysis, and repeatable processes rather than reliance on individual expertise alone.
What effective network (scheme) fee analysis looks like
Effective network (scheme) fee analysis treats network fees as unit economics, not just invoice totals. It focuses on structure, attribution, and repeatability so costs can be measured, governed, and acted on over time.
At a minimum, organizations need the ability to:
· Distinguish required network fees from optional services and subscriptions
· Identify which fees are client-driven versus shared across programs or portfolios
· Understand network fees in basis points and per-transaction terms, not just in absolute dollars
· Break down Visa and Mastercard network (scheme) fees by fee type, driver, and portfolio or program segment
· Link fee changes back to operational behavior, enrollment status, and evolving network programs
· Establish defensible allocation and pass-through rules to support consistent downstream recovery
When done well, this shifts network (scheme) fees from an opaque accounting artifact into a governed, measurable cost line that can be actively managed.
From analysis to optimization
Once visibility exists, optimization tends to follow quickly. Common opportunities include:
Eliminating optional network (scheme) services that no longer match the business need
Correcting enrollment and governance gaps that keep services enabled by default
Improving pass-through and cost allocation frameworks to reduce basis-point leakage
Identifying operational behaviors that trigger avoidable network fees
Building recurring review cycles so fees are revalidated, not forgotten
Accuracy note: Not every fee is avoidable. The point is governance and visibility. Many portfolios have a meaningful subset of costs that are addressable once attribution is clear.
For many issuers and acquirers, network (scheme) fee optimization is one of the highest-ROI cost initiatives available because it addresses both cost growth and pass-through leakage.
Who should own network (scheme) fee governance?
Network (scheme) fee governance is inherently cross-functional. Finance, payments operations, compliance, product, and technology teams all influence how fees are generated.
However, effective governance requires a clear point of accountability.
High-performing institutions typically:
Assign a single accountable owner for network (scheme) fee economics
Support that owner with inputs from operations, compliance, and product teams
Use shared data and definitions to align decision-making
Review network fees on a recurring basis, not only when costs spike
Ownership does not 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 (scheme) fees tend to become nobody’s problem - until margins are already under pressure.
Why this matters now
Network (scheme) fee complexity is increasing across the payments ecosystem as digital payments evolve. At the same time, Visa and Mastercard network fee revenue has been growing faster than underlying payment volumes, reflecting changes in fee structures, assessment logic, and program design rather than simple volume growth.
This creates two important realities:
· Network (scheme) fees can rise even when payment volumes are flat or growing modestly
· Institutions without structured fee visibility are forced into reactive cost management, absorbing increases after the fact
As network-layer economics shift, relying on static assumptions or high-level invoice reviews becomes increasingly risky. Organizations that build structured network (scheme) knowledge and analytics gain leverage, operationally and financially, because they can explain cost drivers, forecast changes, and make informed decisions earlier.
Turning network (scheme) fees into a managed cost line
Network (scheme) fee management is not about eliminating fees entirely. It is about:
Understanding what drives them
Allocating them accurately
Recovering them consistently
Avoiding preventable leakage
Governing optional services with discipline
If you are responsible for payments economics, finance, operations, or pricing and cannot clearly explain your Visa and Mastercard network (scheme) fee exposure, that is the signal to start.
Some issuers and acquirers use CardTraq to analyze Visa and Mastercard network (scheme) fees, identify cost drivers, and improve network fee governance over time.
Frequently Asked Questions About Card Network (Scheme) Fees
How do organizations build subject-matter expertise across tens of thousands of network (scheme) fees?
Building complete subject-matter expertise across Visa and Mastercard network (scheme) fees is inherently difficult. Network fee catalogs include tens of thousands of individual fees that vary by region, program type, transaction behavior, and enrollment status, and they continue to evolve over time.
Even professionals who spend their entire careers in payments regularly encounter new or unfamiliar network fees appearing on invoices. No single individual or team can realistically maintain comprehensive expertise across all fee categories, programs, and regional variations.
As a result, effective network (scheme) fee governance typically relies on:
shared institutional knowledge rather than individual expertise
cross-functional collaboration across finance, operations, compliance, and product teams
access to broader subject-matter expertise across the industry
structured documentation and repeatable analysis rather than ad hoc interpretation
Organizations that recognize this reality focus less on “knowing every fee” and more on building systems and processes that surface, explain, and govern network fees as they change.
What are card network fees?
Card network fees, often called scheme fees outside the US and Canada, are charges assessed by card networks such as Visa and Mastercard for the use of their payment infrastructure, programs, and services. These fees support activities including authorization processing, clearing and settlement, security programs, data services, and optional network tools.
Who pays Visa and Mastercard network (scheme) fees?
Visa and Mastercard generally bill network (scheme) fees directly to principal members, namely issuers and acquirers. In BIN-sponsored and fintech program models, the sponsoring principal receives the charges, even when the underlying activity is driven by individual programs or partners. Merchants typically do not receive invoices directly from the networks.
Are network (scheme) fees the same as interchange?
No. Network (scheme) fees and interchange are separate cost layers.
Network (scheme) fees are paid to the card networks for infrastructure, programs, and services. Interchange is a network-administered fee that flows between the acquiring and issuing banks on each transaction and varies by card type, transaction method, and risk profile.
Both affect payments economics, but they are governed and behave differently over time.
Why do network (scheme) fees keep rising?
Network (scheme) fees continue to rise due to a combination of expanding digital payment activity, new network programs, evolving assessment logic, and the growth of optional services. Importantly, network fee revenue has grown faster than underlying payment volumes in recent years, meaning costs can increase even when transaction growth is modest.
How are Visa and Mastercard network fees assessed?
Network (scheme) fees are assessed using multiple drivers rather than a single rate. Common drivers include transaction volume and value, authorization activity, digital and tokenized payments, geographic mix, participation in monitoring programs, and enrollment in optional services. Fees may be per-transaction, percentage-based, or assessed at a program or portfolio level.
Are all network (scheme) fees mandatory?
No. While some network fees are required for basic processing, many fees relate to optional services, reports, or programs. These optional services may be enabled by default and remain active unless reviewed and cancelled, making them a common source of avoidable cost.
Can network (scheme) fees be passed through to merchants or clients?
In many cases, yes. Network (scheme) fees may be passed through to merchants, fintechs, or clients depending on the pricing model and contractual structure. However, incomplete visibility and unclear attribution often result in partial or inconsistent pass-through, leading to margin leakage.
Why is network (scheme) fee visibility so difficult?
Network (scheme) fee visibility breaks down because fee structures are complex, invoices are difficult to interpret, ownership is distributed across teams, and fee catalogs evolve continuously. Without a structured governance model, new fees are often absorbed as cost rather than identified and managed proactively.
How should network (scheme) fees be measured?
Beyond invoice totals, effective measurement looks at network fees in basis points and per-transaction terms, such as cost per dollar processed and network fee yield over time. These unit-economic views make it easier to track trends, compare portfolios, and identify changes driven by behavior or enrollment.
What does effective network (scheme) fee analysis look like?
Effective network (scheme) fee analysis focuses on structure, attribution, and repeatability. It enables organizations to distinguish required fees from optional services, identify client-driven versus shared costs, link fees to operational drivers, and apply defensible allocation and pass-through rules.
Who should own network (scheme) fee governance?
While multiple teams influence network fees, effective governance requires a clear point of accountability. High-performing institutions assign ownership for network (scheme) fee economics, supported by cross-functional inputs from finance, operations, compliance, and product teams.
How much cost can typically be identified through a network (scheme) fee review?
In practice, when institutions take a structured look at their network (scheme) fees, they often identify approximately 10–20% in potential cost-out opportunities. These opportunities typically come from optional services, governance gaps, and avoidable or misapplied charges.