For the customer, paying by card appears nearly free: a 1,000-ruble purchase deducts exactly 1,000 rubles from their account. Yet in the few seconds between swiping the card and transaction confirmation, multiple parties interact — the merchant, its acquiring bank, the payment system (e.g., Visa or Mir), and the card-issuing bank.
It’s within this chain that fees arise — charged to the merchant, not the buyer. A portion goes to the acquirer (the merchant’s bank); another to the card issuer. That’s how banks earn revenue from cashless payments even when the cardholder pays nothing extra.
This topic is especially relevant in Russia: in Q1 2026, non-cash transactions accounted for 88.9% of retail turnover. Cards remain the dominant payment method, though alternative instruments are gradually gaining share.
- What happens after the customer taps their card
- Acquiring: the merchant pays to accept cards
- How the card-issuing bank earns revenue
- How the acquirer makes money
- Where cashback comes from
- How the SPB changes payment economics
- Who ultimately receives funds from a single purchase
What happens after the customer taps their card
In simplified terms, four parties participate in a standard card transaction:
- The customer uses a card linked to their account.
- The issuing bank issued the card and verifies whether the transaction can proceed.
- The acquiring bank serves the merchant and enables card acceptance.
- The payment system (e.g., Mir, Visa, Mastercard) connects participants and routes data securely.
When the customer taps their card at the terminal, the request travels via the acquirer’s infrastructure to the issuer. The issuer checks for sufficient funds, card validity, and other risk parameters — then approves or declines the transaction.
For the customer, it takes seconds. Financially, however, it represents several interlinked services.
Acquiring: the merchant pays to accept cards
To accept card payments, a merchant signs an acquiring agreement with a bank. That bank supplies terminals, software, and technical support — and charges a fee for these services. So for a nominal 1,000-ruble sale, the merchant actually receives less: the agreed-upon fee is deducted upfront.
There is no universal rate. Fees vary by bank, merchant turnover, business sector, and other factors.
Importantly, the full fee does not go solely to the acquirer. In card networks, revenue is shared among the acquirer, the payment system, and the card issuer.
How the card-issuing bank earns revenue
Suppose a customer pays with a card issued by Bank A at a store served by Bank B. Part of the processing fee — known as the interchange fee — flows to Bank A, the card issuer. This incentivizes issuers not only to issue cards but also to encourage frequent usage.
The higher the non-cash turnover on issued cards, the more interchange revenue the bank potentially earns.
However, interchange income isn’t pure profit. Banks must cover IT infrastructure, cybersecurity, transaction processing, customer support, and loyalty programs.
How the acquirer makes money
The economics for the merchant’s bank differ. It collects the acquiring fee — but shares part of it with the payment system and the card issuer. The remainder must cover transaction processing, terminal leasing, software maintenance, merchant onboarding and support, fraud prevention, chargebacks, and other operational costs. So the advertised acquiring rate ≠ the bank’s net profit.
For large banks, scale matters most. Even tiny per-transaction margins become substantial across millions of daily transactions.
Where cashback comes from
The interchange fee helps explain why banks offer cashback: issuers benefit directly from higher card usage and associated interchange income. They may allocate part of that revenue to rewards and loyalty programs.
But not all cashback is funded solely by interchange. Partners often co-fund promotions — e.g., retailers, airlines, or marketplaces may subsidize elevated cashback (e.g., 10–20%) in specific categories as a marketing tool. Such high rates do not mean the bank earns an equivalent percentage on each transaction. Rather, cashback is a strategic lever to boost customer engagement and card preference.
How the SPB changes payment economics
A major alternative to traditional card payments has emerged: Russia’s System for Fast Payments (SPB).
For merchants, the key difference is cost: SPB transfers incur no fee for the customer. For businesses, the maximum general tariff is 0.7%; for socially significant categories, it’s 0.4%; and for utility payments (Housing and Utilities), just 0.2%.
This creates a strong incentive for merchants to promote QR-code and biometric SPB payments alongside cards.
The trend is visible in statistics. In Q1 2026, non-card digital payments (including SPB) made up 14.9% of total non-cash volume. Russians completed ~1 billion SPB purchases — via QR codes and biometrics — totaling 1.5 trillion rubles.
Who ultimately receives funds from a single purchase
In its simplest form, the flow looks like this:
Customer pays → Merchant pays an acceptance fee → Funds are split among the acquirer, issuer, and payment infrastructure.
For a debit cardholder, this process is invisible. No direct fee is charged — yet every purchase generates interchange and processing revenue for the banking system.
FAQ
Do customers pay fees when using cards?
No — cardholders typically pay no direct fee; all charges are borne by merchants as interchange and acquiring fees.
What is an interchange fee?
An interchange fee is a small percentage paid by the merchant’s bank (acquirer) to the cardholder’s bank (issuer) for each transaction — a core source of issuer revenue.
How does SPB affect bank revenue?
SPB bypasses traditional card networks, eliminating interchange fees. Banks earn only lower, fixed-rate service fees — reducing per-transaction income but increasing volume and lowering fraud risk.
