Visa processed 257.5 billion transactions in its year to 30 September 2025. Its net revenue for that year was $40.0 billion, which works out at 15.5 cents for each transaction it processed.
The shop pays far more than that. On a $100 card payment it can lose $2.75. Most of that money never reaches Visa. This guide follows a single $100 payment: the four parties, the seconds after the tap, the settlement behind it, then who takes which fee.
How does a card payment work? Four parties are involved: the cardholder, the bank that issued the card, the shop, then the shop's own bank. The card network sits between the two banks, moving the message and the money.
A tap is approved in seconds. The money itself moves later, in a separate settlement step.
The card issuer takes most of the fee. A $100 payment in a US shop on a standard rewards credit card costs the shop $2.75, of which $1.61 goes to the issuer. Rates differ by card type and country.
Visa and Mastercard lend nothing. Visa's own annual report says it does not issue cards or extend credit.
The four parties and where the network sits
The cardholder is the person paying. The issuer is the bank whose name is on the card, which holds the account and takes the credit risk.
The merchant is the shop. The acquirer is the merchant's own bank or payment firm, which signs the shop up to accept cards, takes the money in and pays it on.
Visa's annual report calls this "a structure we call the 'four-party' model". The network is not one of the four. It sits in the middle, carrying the message between acquirer and issuer, setting the default fees and guaranteeing that the two sides settle.
What happens in the seconds after you tap
The card sends an encrypted message to the terminal. The terminal passes the transaction data to the acquirer, which presents it to the network.
The network sends it on to the issuer. The issuer checks the balance or the credit line, scores it for fraud, then approves or declines. The answer comes back along the same path, then the terminal prints "approved".
Visa's filing gives 257,545 million processed transactions for its year to 30 September 2025. That is an average of 705.6 million a day.
Nothing has moved yet. All that has happened is a promise.
Settlement, which is slower and separate
Clearing comes next, when the acquirer submits the final amounts. Settlement follows, when the banks actually pay each other through the network.
Interchange is the fee the acquirer pays the issuer on every transaction. In Visa's words, the issuer "effectively pays the acquirer an amount equal to the value of the transaction, minus the interchange reimbursement fee".
The acquirer then pays the shop the purchase amount minus its own charge. Visa's annual report says non-dollar settlements "generally remain outstanding for one to two business days, which is consistent with industry practice".
The gap between the tap and the settlement is a real risk. Visa held $9.2 billion of liquidity at 30 September 2025 to cover a client that fails to pay.
What interchange costs, by card type
Visa publishes its United States rates in a schedule dated 18 April 2026, the Visa USA Interchange Reimbursement Fees. Mastercard publishes its own, effective 17 April 2026.
Source: Visa USA Interchange Reimbursement Fees; YX Insights
On a $100 in-store purchase, a regulated debit card carries 0.05% + $0.21, which is $0.26. Regulated means the card came from a bank with $10 billion or more of assets, where US law caps the fee.
An exempt debit card, from a smaller bank, carries 0.80% + $0.15, which is $0.95.
A standard rewards credit card carries 1.51% + $0.10, which is $1.61. A premium rewards credit card carries 2.30% + $0.10, which is $2.40. Mastercard's standard credit rate, 1.65% + $0.10, is $1.75 on the same purchase.
That premium card costs the shop 9.2 times what the regulated debit card costs. The extra cost of a rewards card is carried by the shop that accepts it.
Where the fee on a $100 purchase goes
Take a $100 in-person payment on a standard rewards Visa credit card. The shop is on the Free-plan flat rate of 2.6% + $0.15 that Square, part of Block, published in October 2026.
The shop pays $2.75 in fees. It keeps $97.25.
Source: Visa USA Interchange Reimbursement Fees; Square published rates; Card Organization Pass-Through Fee Schedule; YX Insights
Of that $2.75, interchange of $1.61 goes to the card issuer, 58.5% of the total. The network assessment, published at 0.14% of a credit transaction in the Spring 2023 pass-through schedule, takes $0.14, or 5.1%.
The remaining $1.00, 36.4%, is the acquirer's and processor's share, including the small per-authorisation charges the flat rate absorbs.
The issuer's share pays for several things at once. It funds the purchase before the cardholder pays, carries the default risk, pays for the fraud checks and buys the rewards. The published schedules do not say how the fee splits between them.
The network moves data and takes a thin cut of a very large number.
How Visa and Mastercard actually earn
Neither company lends. Visa's annual report states it plainly: "Visa is not a financial institution. We do not issue cards, extend credit or set rates and fees for account holders of Visa products, nor do we earn revenue from or bear credit risk with respect to any of these activities."
Source: Visa Form 10-K for fiscal 2025; YX Insights
Visa's revenue in the year to 30 September 2025 came from four lines. Service revenue was $17.5 billion and data processing revenue $20.0 billion. International transactions brought $14.2 billion, other revenue $4.1 billion.
That is $55.8 billion gross. Visa then paid out $15.8 billion in client incentives to banks and partners, leaving net revenue of $40.0 billion. Net income was $20.1 billion, half of net revenue.
Mastercard's 2025 net revenue was $32.8 billion, of which 40.6% came from value-added services instead of the payment network itself.
The same report looks past today's card rails. It names stablecoins among the next-generation technologies Visa is investing in. The companies behind them are covered in what Coinbase does.
Where Stripe, Adyen and Block fit
These firms sit on the acquiring side. They sign up merchants, run the software, handle the settlement, then take a slice of the merchant discount. The merchant discount is the whole amount a shop pays its acquirer on a sale.
Stripe published 2.9% + $0.30 for an online card payment in the United States in October 2026. Square published 2.6% + $0.15 for an in-person payment, the rate used in the example above.
Both are flat rates that bundle interchange, the assessment and their own margin into one number.
Adyen prices differently, passing interchange through and charging its own fee on top. Its 2025 net revenue was €2.4 billion on €1,394.3 billion of processed volume.
The rules that cap interchange
In the United States, the Durbin amendment is section 1075 of the Dodd-Frank Act. It told the Federal Reserve to cap what a large bank can charge in debit interchange. The Fed wrote that cap into Regulation II.
Regulation II caps the fee at 21 cents plus 5 basis points of the transaction. A basis point is one hundredth of 1%, so 5 basis points is the 0.05% in the chart above.
Issuers meeting fraud-prevention standards may add 1 cent, so the most a $100 purchase can carry is $0.27.
Banks with less than $10 billion of assets are exempt from that cap. This is why two debit cards can cost a shop very different amounts.
Europe went further. Regulation (EU) 2015/751 caps consumer debit interchange at 0.2% of the transaction and consumer credit at 0.3%, applying from 9 December 2015. The United Kingdom kept both caps after leaving the European Union.
Credit card interchange in the United States has no cap at all. A standard rewards credit card there carries 1.51% + $0.10, against a ceiling of 0.3% on consumer credit in the United Kingdom and the European Union.
Visa and Mastercard sit in the Financials sector, as the 11 stock market sectors explains, even though neither lends a penny. A card payment looks like one charge to the shop. It is really a chain of separate fees, set by published schedules, with the card issuer taking most of the money.
Common questions about how card payments work
Who gets the fee when I pay by card?
Three parties split it. On a $100 in-store payment costing the shop $2.75, the bank that issued the card took $1.61, the card network took $0.14 and the acquirer with its processor took $1.00. The shop kept $97.25.
How do Visa and Mastercard make money?
By charging for moving and processing transactions, never by lending. Visa's net revenue in the year to 30 September 2025 was $40.0 billion. That came on $17 trillion of payments and cash volume, which is the value of purchases plus cash transactions such as withdrawals, balance transfers and convenience cheques. Mastercard's 2025 net revenue was $32.8 billion.
How long does a card payment take to settle?
Approval takes seconds, while settlement takes longer. Visa's annual report says settlements in currencies other than the US dollar generally stay outstanding for one to two business days. The shop's own bank then credits it, on its own timetable, after clearing has finished.
What is the Durbin amendment?
It is section 1075 of the Dodd-Frank Act, which told the Federal Reserve to limit debit card interchange. The Fed's rule, Regulation II, caps the fee at 21 cents plus 5 basis points of the transaction. One cent more is allowed where fraud-prevention standards are met.
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