Card Fees for Merchants

A customer who pays with a card always incurs a cost for the merchant who sells a good or service, a so-called card fee, payment transaction fee, or service charge.

What is a card fee, and how high is it?

A card fee is the charge that a merchant pays to be able to offer customers card payments. For Visa and Mastercard, the fee is usually between 1.5–2% of the purchase amount. For American Express (Amex), the fee is often higher, around 3% or more. The higher cost for Amex causes some smaller merchants to choose not to accept the card, even though larger retail chains in Sweden often do accept it.

What is required of a merchant to be able to accept card payments?

In order to accept card payments, a merchant must have an agreement with an acquirer. The acquirer is a technology provider that connects the shop to the card companies and banks.

Most acquirers offer a unit price (unit cost). This is often in the form of a percentage-based transaction fee, usually between 1.5–3% of the sales amount.

Example: A purchase of 100 SEK, with a fee of 2%, costs the merchant 2 SEK.

Card Fees for Merchants – Three Main Components

The card fee consists of three parts:

Interchange fee
Goes to the card issuer (e.g., SEB Kort).

Network fee
Goes to the payment network (e.g., Visa, Mastercard).

Acquirer fee
Goes to the acquirer who handles the payment (e.g., Worldline).

How are card fees determined?

The fee is influenced by several factors. Within the EU, the part called the interchange fee is regulated to a maximum of 0.3% for private debit and credit cards, but network and acquirer fees can vary depending on several factors.

• The sales volume
• The average transaction size
• The type of cards most commonly used (private or corporate cards)
• The customer mix (for example, foreign or local customers)

Industries with higher risk, such as online retailers, airlines, or concert organizers, may incur higher fees because the acquirer or card company may have to cover potential chargebacks, for example, if an online retailer goes bankrupt.