Video narration
At the shop, when you pay a hundred dollars by card, does one company keep the whole three-percent fee? No. It's shared. A portion goes to the bank that issued your card. That charge is called interchange: the fee associated with the issuing bank. Usually, that's the biggest piece. The card network also charges a fee; so does the processor handling the shop's payment. Three percent isn't one fee paid to one company. It's a bundle. If this hundred-dollar sale cost the shop three dollars to process, that wouldn't tell you how the dollars are divided. The card, transaction, and shop's agreement affect both the total and the shares. Shops may build processing costs into prices, even when you don't see a separate charge. Usually, most goes to the issuing bank; the network and processor take smaller fees. The exact split varies.