When a credit card is used to make a payment, a fee is systematically charged to the merchant.
At first glance, it's hard to understand the reasons for and dynamics of these notorious commissions. Commissions can seem obscure and unjustified.
In this article, we explain the payment business model.
Card payment fees
When a credit card is used to make a payment, a fee is systematically charged to the merchant.
Billed commissions can be divided into 3 different categories:
- Network fees (Visa, Mastercard, Cartes Bancaires)
- Interchange
- Payment processor margin
The first 2 fees represent, in a way, the cost of a bankcard transaction. These fees are unavoidable and help finance the payment infrastructure.
Payment processors like Easytransac actually take only a small margin on top of these fees.
Network costs
We're all familiar with the major networks such as Visa, Mastercard and the French company Cartes Bancaire. We see all these well-known logos on the cards in our wallets. Their role is to ensure that a secure infrastructure and procedures are in place to guarantee payment.
In particular, they link the card of a customer of bank A with a merchant working with bank B. The role of these networks is to enable bank B to be certain of being paid by bank A following a payment.
This service is billed to merchants in the form of fees. The fees charged by the networks are both a percentage of the transaction and a fixed amount. Fees depend on the type of card.
Interchange fees
The principle is as follows: when a card payment is made, the customer's "cardholder" bank receives an amount from the merchant's "acquirer" bank. This amount is called interchange. Historically, this logic was put in place to encourage banks to distribute as many bankcards as possible to their customers. The logic is still in place.
This is one of the secrets of payment: a major part of the fee goes neither to the major card networks nor to the payment processor, but to the customer's bank.
The fees charged have been capped by European regulations at 0.2% and 0.3% respectively for debit and credit cards for individuals. Fees for commercial cards remain uncapped for commercial or non-European cards.
A French debit card costs much less than a non-European commercial card. From one card to another, fees can vary widely.
Payment processor margin
On top of these incompressible costs, the payment processor charges a margin for the service provided. It's important to understand that significant costs are always involved in offering a payment service. These include regulatory, security, IT development and service costs.
EasyTransac is both an agent of a payment institution and has obtained PCI-DSS security regulations.
Choosing a quality service provider is very important for a merchant. Conversion rates and support in the event of a disputed transaction are essential if you are to grow your business serenely.
Complex costs simplified by modern players like EasyTransac
We hope that these few explanations will give you a better understanding of the economic structure of a credit card payment.
If the logic is as described below, it's important to understand that fees vary considerably from one payment to another, or from one card to another.
Easytransac takes the complexity out of payment. The service also offers competitive and, above all, transparent rates on its website.
Who we are
With more than 60,000 customers, Easytransac capitalizes on a decade of expertise in various payment solutions (distance selling, ecommerce, convenience selling, cashless, mobile payment...).
Recently integrated into the HOPPS group and in a strategic alliance with InEvents, Easytransac is at the forefront of innovation in the ecosystem of electronic payments and hybrid and cashless solutions that meet the requirements of e-merchants, event professionals and SMEs.
Our platform simplifies transactions and enriches the user experience, thanks to an intuitive interface and real-time tracking, while ensuring security at every payment.
