I hope that since 2015 this author has learned about interchange and realises that this is not down to the processors but to the issuers and schemes. This reads like a blog post about someone complaining that a bar charges more for beer than for what the brewery sells it to the bar owner.
Interchange is capped at 0.3% in the EU (0.2% for debit cards). Paypal + Stripe charge 1.9% + €0.25 for merchants in the EU charging EU customers.
Also, you can't blame a 3-5% currency conversion fee (often paid twice - once by the customer and once by the merchant) on interchange.
IMO the currency conversion is the real problem here... that's the hidden charge. The payment processing fee was agreed up front with full transparency for the merchant. And chargebacks are an unfortunate mess created by the fact that card networks are inherently quite rubbish. But FX fees can basically be whatever makey-uppy number the processor wants them to be.
I believe he means that most of those things come from the credit card networks or the issuing banks.
Many of these charges can vary quite a bit from transaction to transaction. My understanding is that really high volume merchants (e.g., Apple or Amazon) can get processing that just passes through all of those things to them. Each individual transaction might involve scores of very small fees.
At the other end of thing, you have processors that work like the way Braintree originally worked. They would look at all those little fees in aggregate across all the transactions they were processing, and sorted the transactions into two bins based on total cost for the transaction.
They then charged the merchant a fixed rate for each transaction depending on which bin it fell into. From the merchants point of view, then, if you did 100 transactions each would incur fees of either X% or Y%, and the percentage that got charged X% would be about the same every month.
There are processors who are kind of in-between. The have an X% that rolls up most of the numerous underlying fees, but do expose you do some of those fees. Here some examples I've seen on a bill from such a processor.
For Discover cards, there was an "authorization request fee" of $0.0025, a "data transmission fee" also $0.0025, a "data usage fee" of $0.0185, an AVS fee of $0.02, an "authorization fee" of $0.20, an "assessment/sponsorship" charge of 0.12%, and an everything else of 2.48%.
MasterCard had fees ofr NABU, AVS, and authorization of $0.0195, $0.02, and $0.20. Their percentage fees were for acquirer license, digtal enablement, assessment/sponsorship, cross border, global acquirer support, and the everything else bucket. These were 0.0055%, 0.01%, 0.12%, 0.6%, 0.85%, and 2.33%.
VISA had fees for variable debit, variable credit, AVS, transaction integrity, and authorization, of $0.0155, $0.0195, $0.02, $0.10, and $0.20. Percantage fees were CR product assessment, assessment/sponsorship, international acquiring, international service, and the everything else bucket. 0.02%, 0.11%, 0.45%, 0.8%, and 2.316%.
