For many acquirers, profitability management should be straightforward. Interchange fees are transparent, merchant pricing is established, and transaction volumes are known.
Yet many acquiring businesses continue to experience margin leakage without fully understanding its origin.
The reason often lies in one of the most complex areas of acquiring economics: scheme fees.
Unlike interchange, scheme fees are difficult to calculate, allocate and reconcile. They consist of numerous fee categories, are typically invoiced at an aggregate level, and cannot be easily calculated with complete accuracy during transaction processing. This creates a significant challenge for acquirers seeking to understand true merchant profitability and recover costs effectively.
As John Berns, Managing Director at SRM Europe, explains:
“Most acquirers are either knowingly or unknowingly losing margin on scheme fees every month – not because of bad pricing, but because the data to control it simply doesn’t exist.”
The Challenge with Traditional IC++ Models
Interchange++ pricing is designed to provide transparency by separating costs into three components:
- Interchange
- Scheme fees
- Acquirer Processing fee
While interchange and Acquirer Processing fee are relatively straightforward to manage, scheme fees remain the most complex element to attribute accurately.
As a result, many acquirers rely on estimation methodologies to allocate costs to merchants. These approaches vary across the industry and can create inconsistencies between actual scheme invoices and merchant billing.
This creates several challenges:
- Under-recovery of scheme costs
- Reduced acquiring margins
- Limited visibility of merchant profitability
- Increased operational complexity
- Questions around fee transparency
As merchants, and particularly Enterprise merchants, scrutinise costs more closely, acquirers need greater confidence in how scheme fees are allocated and recovered.
Introducing Merchant-Level Scheme Fee Intelligence
To address this challenge, SRM and Torus have collaborated to deliver a Merchant Scheme Fees Monthly Report designed specifically for acquiring businesses.
The solution calculates scheme fees at billing line level and Merchant ID level, enabling acquirers to understand how scheme costs are distributed across their portfolios and compare allocations directly against actual scheme invoices.
The result is greater visibility into one of the most complex and least transparent areas of acquiring.
How It Works
Combining Torus’ profitability intelligence technology with SRM’s transaction economics expertise, the solution reconstructs scheme invoices and allocates costs at a much more granular level.
The reporting provides:
- Merchant-level scheme fee allocation
- Transaction-level cost visibility
- Reconciliation against scheme invoices
- Profitability analysis
- Enhanced cost recovery capabilities
The technology has been developed to achieve nearly 100% accuracy when compared against the original scheme invoice, which remains the ultimate source of truth.
This level of precision enables acquirers to move beyond broad estimations and take a more data-driven approach to scheme fee management.
From Visibility to Action
Accurate scheme fee allocation is about more than reporting. It enables acquirers to better understand portfolio performance, make more informed commercial decisions and identify opportunities to improve margin recovery.
With greater visibility into scheme costs, acquirers can:
- Improve profitability reporting
- Support pricing reviews
- Increase confidence in IC++ pass-through models
- Strengthen transparency with merchants
As margins come under increasing pressure, understanding the true cost of acceptance is becoming a critical capability.
The Bottom Line
Scheme fees remain one of the most complex and least transparent components of acquiring economics. While many acquirers have visibility of interchange costs, understanding the true impact of scheme fees at the merchant level remains a challenge.
The collaboration between SRM and Torus helps address this gap by providing merchant-level scheme fee intelligence that improves cost recovery, strengthens profitability analysis and brings greater transparency to merchant billing.
For acquirers looking to protect margins and gain a clearer understanding of merchant economics, accurate scheme fee reconciliation represents a significant opportunity.
Ready to Protect Your Acquiring Margins?
Connect with our team to learn how merchant-level scheme fee reporting can help uncover hidden profitability opportunities and improve confidence in your IC++ model.
Posted by John Berns of SRM Europe on June 18th, 2026.
