3 PAYMENT METHOD SCORECARD: CARD | CREDIT
can range depending on the size of the merchant and their operating environment. Larger merchants with the means to invest in custom APIs may consider building a solution in-house which would involve creating the front-end user experience as well as the back-end integration to accept card payments. If they operate in-store and online, multiple front- end and flows would be needed. This would demand higher costs up-front, but likely lower monthly costs to a provider. However, smaller merchants may opt for a plug-in option with a gateway that allows them to accept payments without creating the user experience and accompanying software but may lead to higher costs in the long run with monthly subscriptions to use the provider’s services. 802 Consumer/Bank Costs Rewards Credit card rewards programs attract consumers with promises of cashback, travel points, and exclusive benefits. Five major U.S.-based banks (JPMorgan Chase, Bank of America, Citibank, Capital One, and Wells Fargo) publish interchange fee incomes as part of their annual public disclosures. These five banks posted a combined $70.8 billion of interchange (and in some cases merchant processing fees) income in 2022.They also posted $53.1 billion in cardholder rewards expenditure in 2022, suggesting on average 75% of fee income is paid out to consumers in rewards. Four of the five banks posted higher levels of interchange/merchant processing income than cardholder rewards expenditure. 803 Additionally, CMSPI analysis at an individual card type level supports the conclusion that banks typically generate higher interchange fee income than they incur in cardholder rewards expenses. Interest Payment on Debt The average credit card interest rate in the U.S. market as of May 2025 is 28.67%. 804 Surcharging Surcharging is banned in many countries, and many network rules also ban surcharging. Even where it is allowed (e.g., Australia and some U.S. states), there are limitations including loss of sales. Complex laws surrounding surcharging means merchants are often not able to exercise their right to surcharging.
Cost
Metrics
Weight Score
Average Fee Level
15% 3.0 10% 1.5
Competitive Leverage
Competition within Payment Method
15% 2.0
Fixed Cost Rewards
10% 2.0 15% 5.0 15% 1.0 20% 3.0
Interest Payment on Debt
Surcharging TOTAL SCORE
2.5
Merchant Costs Average Fee Level (Updated as of September 4, 2025.) According to CMSPI’s Cost of Payments Analysis, credit card’s average fee is 1.65%. Competitive Leverage Card payments are the most popular consumer payment method in most countries, sometimes by large margins. Specifically for credit cards, the rewards structures create incentives for consumers which makes them more competitive to other payment methods. It would be difficult for a merchant to not accept card payments. Credit card co-branded cards provide merchants with an opportunity for competitive leverage on costs. However, this may be only a realistic opportunity for larger merchants; blanket competition, i.e., co-badging, could be more beneficial overall. Competition within Payment Method Co-badging is generally not available on credit cards. However, there are exceptions in countries like France and South Korea. In the United States, the Credit Card Competition Act (CCCA) would increase merchants’ competitive leverage for credit cards if enacted. Fixed Costs Fixed costs for credit and debit card acceptance
168
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