On The Wire · 2026-05-31 · 7 min
The actual cost of moving €100 between two bank accounts in real time, via SEPA Instant: €0.02-0.05. The cost a merchant pays for a €100 card transaction: €0.80-2.50. The multiplier is 16-125x. Card processing doesn't cost 2% because the infrastructure is expensive. It costs 2% because the market structure allows it. Four to six intermediaries each take a cut: issuing bank (interchange), card network (assessment), acquiring bank (markup), processor (fees), gateway (more fees). This briefing breaks down where every euro goes on a €100 card transaction, why each component exists, and which ones reflect actual costs versus pricing power. Then it does the same for A2A at 0.5% - one intermediary, no legacy cost structure, instant settlement. Full episode for merchant scenarios from coffee shop to subscription SaaS, the bank-side defensive vs offensive playbook, and the 10-year fee compression trajectory. Full source material and the complete breakdown:
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