Where your card fee actually goes

When a shopkeeper is quoted a card rate, they are quoted one number. That number is at least three different fees stacked on top of each other, and only the smallest of them is the acquirer's.

The three layers

• Interchange — paid by the acquirer to the card issuer, set by the scheme, not negotiable by anyone in the room.
• Scheme fees — paid to Visa or Mastercard for using the network, per transaction and as a share of value.
• Acquiring margin — what the payment provider actually keeps for running the terminal, the risk and the settlement.

On a typical South African contactless debit transaction, interchange and scheme fees together account for the majority of the merchant discount rate. The provider's own margin is the smallest slice. That is why every acquirer's pricing looks broadly similar: they are all passing on the same fixed cost, and competing on the remainder.

What changes in a closed loop

Interchange exists because two banks must be made whole for moving money between them. If the person paying and the shop being paid hold their balances in the same ledger, there is no interbank leg. Nothing is settled between institutions, so no institution needs compensating.

That is the entire trick. It is not a discount and it is not a loss-leader — it is the absence of a cost. The remaining fee covers our own processing, fraud monitoring and the reserve we hold against disputes.

Why we still support the open loop

A closed loop is only cheap when both sides are inside it, and a shop cannot refuse the customer who banks elsewhere. So the same QR code accepts every South African bank app over PayShap, and the same handset takes any contactless card. The rail is chosen automatically, per transaction, and printed on the record so the merchant can see which fee applied and why.

The fee schedule on our pricing page is the standard published pricing, inclusive of VAT. Where a signed merchant agreement differs, that agreement governs.