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Learning objectives

  • Understand the different types of fees associated with virtual cards
  • Learn how and why cross-border charges apply, even for USD cards
  • Break down how card networks, issuers, and processors make money
  • Build a realistic revenue model around your own card product
  • Learn to communicate fees transparently to users while protecting margins

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Why this matters

Most people assume card payments are free or that all costs are covered by the merchant. That’s a common misconception, especially in virtual card systems where issuers and platforms operate under tighter margins and higher risks. If you’re launching a card product and don’t understand fees, you risk:
  • Losing money on each transaction
  • Getting surprised by network charges
  • Creating a poor user experience during “mystery declines” or FX markups
  • Building a product that can’t scale profitably

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Types of card fees

Below is a breakdown of fees you may encounter or need to pass on:

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Understanding cross-border fees (even in USD)

This is one of the most misunderstood aspects of virtual cards. Even if:
  • Your card is denominated in USD
  • The user is in Nigeria
  • The merchant charges USD
You may still pay a cross-border fee. Why? Because the location of the merchant’s acquiring bank matters more than the currency. Example: You buy Facebook Ads from Nigeria. Charged in USD. Facebook routes the payment through a bank in Ireland. Visa classifies this as a cross-border transaction. You get charged 2.5% + $0.50, passed from the network to your processor, and to you. This is not a bug. It’s a common reality of global payments infrastructure.

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FX fees vs. Cross-border fees

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Realistic card revenue models

Let’s now look at how platforms make money on card products.
  1. Flat Markup on Top-Up
  2. Charge a fixed fee per load.
  3. E.g. Top up $100 → Fee: $1
  4. Pros: Easy to communicate
  5. Cons: Doesn’t scale with spend
  6. Percentage Spread
  7. Take a margin on top of what the processor charges.
  8. E.g. FX Rate 750 → Charge 765
  9. Pros: Scales with spend
  10. Cons: Must be justified and visible
  11. Subscription Model
  12. Charge users monthly for access to premium card features.
  13. E.g. $2/month for higher limits, more cards
  14. Pros: Predictable revenue
  15. Cons: High churn risk if spend is low
  16. Hybrid (Most Common)
$1 per card creation $1 top-up fee per $100 2.5% FX markup on cross-border spends Volume-based revenue share from processor (if available)

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Revenue stream design for different audiences

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Internal float cost vs. Pass-through

You may choose to:
  • Absorb some card fees to improve UX (loss leader model)
  • Pass through fees exactly as charged
  • Mark up to create a margin
Your strategy depends on your market, customer LTV, and whether cards are a product or a feature in a broader system.

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How to display fees transparently

Users respect honesty. Show:
  • Top-up cost in the confirmation screen
  • Cross-border fee warning after known merchants (e.g., Facebook, Alibaba)
  • $0.50 + 2.5% breakdown when showing statement
  • Refund policies and chargeback timelines
  • Freezing and termination costs (if any)
Avoid “surprise fees.” Those break trust.

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Recap

  • Every card product has costs, some fixed, some per-transaction, some hidden in network rules
  • You must understand and model FX, cross-border, top-up , and operational fees
  • Monetization can be flat, tiered, or volume-based: design it to match your users
  • Transparent communication is not just ethical. It’s good product design