Here's a breakdown of who gets what fees during payment processing:<p>1. Credit Card issuer. They get the bulk of the fees because they assume all cardholder risks. Besides fraud risk, they also care about the riskiness of the loan to the cardholder.<p>2. Gateway / Third Party Processor. The gateway helps a merchant process some part of the fees(e.g. tokenization, authorizations, settlements, etc.). Generally, they get a smallest percentage of the transaction. Authorize.net or Stripe would be examples of these.<p>3. Merchant's bank. They basically buy a merchant's credit/debit sales. They get a percentage of the transaction. If your transaction volume is high enough, you can probably convince your bank to lower your rate.<p>4. Visa/MC. Technically, they don't get anything. However, banks are required to pay dues in order to offer or process MC or Visa cards.<p>Some other things to note:<p>Online sites often use a Gateway directly and don't have a merchant bank. In those cases, the Gateway is acting as both a gateway and a merchant's bank.<p>Issuing banks (the bank that gives customers a credit card) charge higher fees for reward cards so that they can provide customers with rewards. Rewards cards are annoying for merchants because one can't always tell if a card is a reward card or a regular credit card. Additionally, fees for different rewards are different. These fees can be found in the voluminous fine print in your credit card agreements.