Payments, Cards and Networks

Every time someone taps a card, a dozen companies take a slice of the sale. On a typical US credit card purchase the merchant pays around 2–3% of the price; in 2024 US merchants paid about $187 billion in card processing fees on ~$11.9 trillion of card purchases, or about $1.57 per $100 (Nilson Report, reported). Most of that money goes to the bank that issued the card, as interchange, and much of it is returned to cardholders as rewards. The networks that set the rules, Visa and Mastercard, take only a few basis points of each payment but earn operating margins above 50%, which makes them among the most valuable financial companies in the world. Around them sit processors, acquirers, payment facilitators, wallets and gateways, and alongside them a fast-growing set of cheaper bank-to-bank instant payment systems: The Clearing House's RTP network, the Fed's FedNow and bank-owned Zelle (abroad, India's UPI and Brazil's Pix show how far such rails can go). This section explains the four-party model, who earns what in a card payment, how networks, issuers, acquirers and payment facilitators make money, the regulation of interchange in the US and Europe and the long litigation over it, wallets, real-time payments, cross-border payments and stablecoins, fraud, and US money-transmission licensing, remittances and the 2026 federal remittance tax. A worked example computes the fee waterfall on a $100 purchase under US credit, US regulated and exempt debit, EU caps and payment-facilitator pricing, and a checklist sets out diligence questions for payments businesses.