Interchange, scheme fees and merchant service fees — what’s the difference?

Three layers, three destinations

A card fee isn’t one charge — it’s a stack. The first layer, interchange, is paid to the issuer: the bank that gave your customer their card. The second, scheme fees, is paid to the card network that runs the rails — Visa, Mastercard or eftpos. The third is the acquirer or provider margin, kept by the business that signs you up and processes the payment. Each layer pays a different party for a different role.

How they roll up into the MSF

The merchant service fee is simply those three layers combined into the number you actually pay. When a provider quotes you a single percentage, all three are baked in. An interchange-plus pricing model separates the interchange layer out and shows a fixed visible margin on top, whereas flat-rate and blended pricing average the whole stack into one figure — which is why the same headline rate can hide very different underlying costs.

Why the distinction matters in 2026

The RBA’s 2026 changes apply to interchange — the issuer layer — not to scheme fees or the provider’s margin. That’s why a lower interchange cap doesn’t automatically shrink your MSF: the other two layers are unaffected, and only your provider can decide whether to pass the interchange saving through. Pricing that exposes the interchange layer separately tends to make any pass-through easier to see. All figures here are indicative, and this is general information rather than advice.

Source: RBA Review of Merchant Card Payment Costs and Surcharging — Conclusions Paper (March 2026).