Who charges a transaction fee
- A PSP or acquirer to a merchant, for each card payment accepted
- A gateway, as a fixed fee per request on top of the acquirer's rate
- A bank or card issuer to its customer, for cash withdrawals or foreign-currency payments
- A payment institution to a sender, for a transfer or remittance
- A blockchain network, to whoever sends a transfer
What EU rules say about transaction fees
Where the providers of both payer and payee are in the EU, PSD2 has each side pay its own: the payee pays the charges levied by its provider, and the payer those levied by the payer's provider (Article 62(2)).
For card payments, the Interchange Fee Regulation requires the payee's provider to give the merchant, after each transaction, a reference identifying the transaction, its amount and the amount of any charges, with the merchant service charge and the interchange fee shown separately (Article 12). With the merchant's prior and explicit consent, the information may be aggregated.
Why transaction fees matter in a payments product
The fee schedule is the product's price list. A platform works out the right fee for each payment at the moment it happens, by payment method, card type, country and volume tier, and posts it to the ledger as its own entry, apart from the payment. That record is what makes invoices, merchant statements and revenue reports agree.
Transaction fee, processing fee or network fee?
- Processing fee
- The transaction fee a merchant pays for card acceptance, made up of interchange, scheme fees and the provider's margin.
- Fixed or monthly fee
- Charged per period, per terminal or per account, whatever the number of payments.
- Network fee
- On a blockchain, paid to the network's validators or miners, not to a payment provider.
Where a transaction fee shows up in a platform
Modules that do the work
- LedgerThe double-entry book of record behind every balance, fee and transfer.
- Card acquiringCard acceptance on the phone, in store and online, through the acquirer you choose.
- PayoutsMoney out to bank accounts, cards and wallets, on the rail that fits each payment.
- Analytics & monitoringProduct analytics, attribution, engagement and crash reports, on a tracking plan you control.
Platforms that need it
Where it is written
The laws and standards this page's facts come from.
- Directive (EU) 2015/2366, PSD2, Article 62(2) (EUR-Lex)
- Regulation (EU) 2015/751, the Interchange Fee Regulation, Article 12 (EUR-Lex)
General information, not legal advice: what applies to you depends on your services and your market.