Question 1

What are the main components of payment processing costs?

Accepted Answer

There are four layers: Interchange fees — 70–90% of total fees, set by the card networks and paid to issuing banks. Rates range from 0.05% for regulated debit to 2.95% for premium credit. Scheme assessment fees — Visa 0.14% and Mastercard 0.13–0.14%; these fees are non-negotiable. Processor markup — The negotiable portion of total fees, typically 0.15–0.50% on interchange-plus pricing. Penalties and compliance fees — Includes VAMP disputes at $8 each, retry penalties at $0.10–$1.00, and non-tokenized card-on-file fees, among others. These costs can be avoided with proper monitoring.

Question 2

How can I reduce interchange fees?

Accepted Answer

You can reduce interchange fees by settling within 24 hours to avoid downgrades, submitting complete AVS and CVV data on all card-not-present transactions, providing Level 2 or Level 3 data for commercial cards to access potential savings through programs such as Visa CEDP, using network tokenization for stored credentials, routing regulated debit through the lowest-cost networks under Durbin compliance, verifying correct merchant category code assignment with each processor, and ensuring authorization and capture amounts match within 15%.

Question 3

Why does the same transaction face different interchange rates at different PSPs?

Accepted Answer

Interchange qualification depends on the data that travels with the transaction through multiple handoff points. You may send different data fields to each payment service provider. Each provider constructs the authorization message differently, and not all providers populate the same fields or pass network tokens instead of raw primary account numbers. Each acquirer also communicates differently with the card network. By the time the network assigns an interchange category, the same transaction can look different depending on who processed it. Pagos normalizes data across payment service providers to pinpoint where these differences drive higher costs.

Question 4

What is the VAMP threshold for 2026?

Accepted Answer

The Visa VAMP excessive threshold drops from 2.2% to 1.5% on April 1, 2026, for North America, Europe, and Asia-Pacific. The ratio is calculated as TC40 fraud reports plus TC15 disputes, divided by TC05 settled transactions. Merchants exceeding the threshold face an $8 fee per card-not-present dispute. Fraud chargebacks count twice because they can be included as both TC40 fraud reports and TC15 disputes. Pagos monitors your VAMP ratio in real time and alerts you before you reach enforcement thresholds.

Question 5

How does Pagos compare to hiring a payment consultant?

Accepted Answer

Consultants conduct periodic reviews, often quarterly or annually, analyze transaction samples, and deliver point-in-time reports. Pagos monitors every transaction in real time, detecting fee anomalies in minutes rather than months. Many enterprises use both: Pagos as the continuous data and alerting layer, and consultants for contract negotiations and strategic advice. The combination is stronger than either approach alone.

Question 6

What penalty fee should I watch for in 2026?

Accepted Answer

Key penalties include the Visa Misuse of Authorization Fee at $0.15 per transaction; the Visa Excessive Retry Fee for more than 15–20 retries within 30 days; the Visa Issuer Never Approve Fee at $0.10 for domestic transactions and $0.15 for international transactions; the Mastercard Excessive Authorization Attempts Fee at $0.50 per transaction after more than 10 declines on the same card within 24 hours; the Mastercard Transaction Processing Excellence penalty at $0.03–$0.50 per transaction; the Mastercard Not Tokenized Card-on-File Fee at $0.50–$1.00 per instance; and VAMP penalty fees at $8 per card-not-present dispute. A single misconfigured retry loop can generate thousands of dollars in monthly penalties.

Question 7

What effective rate should I be paying?

Accepted Answer

Typical all-in effective rates, calculated as total fees divided by total transaction value, for US card-not-present transactions are: small merchants processing under $1 million typically pay 3.2–4.0%; medium merchants processing between $1 million and $10 million typically pay 2.5–3.5%; and large merchants processing over $10 million typically pay 1.5–2.0% on interchange-plus pricing. If your effective rate is significantly above these ranges, there may be optimization opportunities in interchange qualification, processor markup, penalty avoidance, or cross-border routing.

Data Harmonization

Your

Processor

Speak

Different

Languages

Pagos Translates

Pagos Translates

All of Them

THE SOLUTION

Same Thing,

Same Thing,

Different Name

Decline Code

Stripe →

Adyen →

Same response, different labels

Issuing Bank Name

PSP A →

PSP B →

Same bank, different formatting

Approval Rate Definition

Braintree →

Adyen →

Same metric, different calculations

MECHANICS

How Pagos

How Pagos

Harmonization Works

Harmonization Works

Consolidate

Consolidate

Normalize

Normalize

Enrich

Enrich

ACTION

Taking Action

with Harmonized Data

with Harmonized Data

Cross-Processor Benchmarking

Interchange Cost Reduction

Pagos AI Analyzing your payment data…

Condition

Route to

Expected Lift

Any EU Country

European acquirer

≈+20pp

Scheme:Visa + Card Type = Debit

Processor with strong Visa Debit

≈+13pp

Issuer Country = Brazil

Local acquirer (Clelo/Rede)

≈ +8pp est.

Intelligent Routing

Decline Analysis

Issuer Behavior Analysis

Reconciliation Automation

New Anomaly

New Anomaly

Real-Time Anomaly Detection

Industry Benchmarking

AI READY DATA

AI READY DATA

Harmonization: The Prerequisite for

Harmonization: The Prerequisite for

AI Analysis

Pagos AI

Pagos MCP:

What decline codes drove the spike in failures on May 15th?

What are my top dispute reasons this quarter, broken down by processor?

Which issuing bank has the lowest authorization rate for Visa debit in the US?

How do my cross-border fees compare across Stripe and Adyen this month?

Hello, I'm here to help make sense of your payments data…

WHY PAGOS

Built For

AI

AI

$1.2T+

Scheme:
Visa + Card Type = Debit

See your Payment
Data as one