A business may know its total monthly processing cost without knowing where that money actually goes.
That distinction is important because the full amount shown on a merchant statement does not go to the processing company. Processing costs typically include several separate components paid to different participants in the payment system.
The Cost Breakdown section of Mosaic Processing’s analysis turns those expenses into a simple visual comparison. It shows how the merchant’s current total cost is divided and how that allocation could change under the proposed Mosaic pricing.
The graphic focuses on three major categories:
- Interchange and card-brand pass-through costs
- Processor markup and fees
- Other or regulatory expenses
By displaying both the dollar amount and the percentage of the total, the chart helps merchants understand which costs remain unchanged, which may be reduced, and where the proposed savings actually come from.
Your Total Processing Cost Is Made Up of Different Parts
When a customer pays with a card, multiple organizations may participate in completing the transaction.
These can include:
- The bank that issued the customer’s card
- The card network
- The merchant’s processor
- A gateway or technology provider
- Other payment-service participants
Each may receive a portion of the total processing expense.
A merchant statement often combines these costs into a single monthly total. That makes it easy to assume that the processor is responsible for—or receives—the entire amount.
The Cost Breakdown corrects that misconception by separating the total into recognizable categories.
Interchange and Pass-Through Costs
The largest section of the chart usually represents interchange and card-brand pass-through expenses.
Interchange is generally paid to the financial institution that issued the customer’s card. The amount can vary depending on several factors, including:
- The type of card used
- Debit versus credit
- Consumer versus commercial cards
- Rewards programs
- How the payment was accepted
- The merchant’s business category
- The transaction information provided
- The perceived risk of the transaction
Card networks may also charge assessments and other fees that are passed through as part of the transaction cost.
These expenses are generally established outside the processor’s direct control. Moving from one processor to another does not normally eliminate them.
That is why the chart may show the same interchange and pass-through amount for both the current provider and the Mosaic proposal.
Showing the amount as unchanged is a key part of an honest comparison.
Why the Interchange Percentage Can Increase Even When the Amount Stays the Same
One detail can initially seem confusing: the interchange amount may remain unchanged while its percentage of the total processing cost increases.
That does not mean interchange became more expensive.
It means the overall processing cost became lower.
For example, imagine that a business currently pays:
- $2,200 in interchange and pass-through expenses
- $400 in processor markup
- $25 in other fees
Its total monthly cost would be $2,625.
Interchange would represent approximately 84% of that total.
If the processor markup were reduced to $200 while interchange remained $2,200, the new total would be approximately $2,425.
Interchange would now represent about 91% of the total—even though the dollar amount did not change.
The percentage increased only because the processor-controlled portion became smaller.
This is an important visual indicator. A higher interchange percentage in the proposed column may demonstrate that more of the remaining cost consists of pass-through expenses and less consists of processor markup. The comparison assumes the same transaction profile; routing and qualification changes can affect pass-through costs.
Processor Markup and Fees
The second section represents processor markup and related processor-controlled fees.
This is the amount the processing provider charges above the underlying interchange and card-brand costs.
Depending on the pricing structure, processor markup may include:
- A percentage of card volume
- Per-transaction charges
- Authorization fees
- Batch fees
- Monthly account costs
- Gateway charges
- Other processor-controlled expenses
This is often the area where the greatest opportunity for savings exists.
When Mosaic analyzes a merchant’s statement, we separate this portion from the underlying network costs. We then compare the current provider’s processor-controlled pricing with the proposed Mosaic pricing.
If the Mosaic portion is smaller, the chart shows both the lower dollar amount and its lower share of the total cost.
This makes the savings easier to understand. The chart is not suggesting that the card networks became less expensive. It is showing that the amount retained through processor markup and related fees may be reduced.
Other and Regulatory Expenses
The third category includes other recurring or regulatory charges.
Depending on the statement and processing arrangement, these may include:
- Monthly account fees
- PCI-related charges
- Regulatory expenses
- Platform or service costs
- Statement fees
- Other recurring charges
These expenses may be controlled by the processor, passed through from another provider, or associated with a specific account feature.
They are shown separately because they do not always fit cleanly into either interchange or processor markup.
This category is often much smaller than the others, but it still matters. Even a modest monthly fee repeats every month and should be included in the overall comparison.
A complete analysis should not ignore a fee simply because it represents only a small percentage of the total.
Why the Visual Comparison Is Useful
A table of fees provides exact numbers, but a visual cost breakdown reveals the relationship between those numbers.
At a glance, the merchant can see:
- Which category represents most of the processing expense
- How much consists of network-controlled costs
- How much is attributed to processor markup and fees
- Whether the processor-controlled portion is being reduced
- How the total monthly expense changes
- Why the proportions differ between the two providers
This helps business owners move beyond the idea that processing is one single rate.
Two proposals could have similar total costs but allocate those costs differently. One may have transparent pass-through pricing and a clearly defined markup. Another may blend network costs and processor margin together.
The chart makes those differences easier to identify.
The Difference Between Cost and Margin
The total processing cost represents what the merchant pays.
Processor markup and related fees are charges above underlying interchange and card-brand costs. Some of those amounts may be paid to gateways or other providers rather than retained by the processor.
Confusing those two figures can lead to unrealistic expectations.
If most of a merchant’s cost consists of interchange and card-brand fees, no processor can responsibly promise to eliminate the majority of the total expense. The real opportunity is to examine the portion above those unavoidable costs.
This is why a reduction in processor markup can be meaningful even if the overall effective-rate improvement appears relatively modest.
The merchant is reducing the portion that can realistically be changed.
A Larger Business Can See a Bigger Dollar Impact
Processor markup is often percentage-based. As a result, even a small reduction can create significant savings when applied across a large amount of card volume.
A 0.20% difference equals:
- $20 per month on $10,000 in volume
- $200 per month on $100,000 in volume
- $1,000 per month on $500,000 in volume
- $2,000 per month on $1 million in volume
This is why the dollar amount and percentage should always be reviewed together.
A fraction of a percentage point may look small on paper, but its financial impact depends on the size and transaction profile of the business.
The Chart Helps Verify the Savings
A credible proposal should allow the merchant to trace the estimated savings back to the underlying numbers.
The Cost Breakdown helps verify that:
- The comparison uses consistent assumptions for interchange and pass-through costs.
- Processor markup is reduced.
- Other expenses are properly included.
- The new total equals the sum of those categories.
- The estimated savings equal the difference between the two totals.
This creates a clear connection between the detailed statement analysis and the final savings estimate.
If the proposed savings cannot be explained through these categories, the merchant should ask for more information.
What Merchants Should Look For
When reviewing a processing cost breakdown, ask:
- Are interchange and processor markup separated?
- Are the pass-through amounts realistic?
- Does the proposal clearly identify what remains unchanged?
- Is the processor-controlled portion lower?
- Are monthly and regulatory expenses included?
- Do the category amounts add up to the total?
- Can the difference be verified using the statement?
The purpose of the visual is not simply to make a proposal look attractive. It should make the proposal easier to evaluate.
Transparency Means Showing Where the Money Goes
At Mosaic Processing, we believe merchants should understand the full structure of their processing costs.
The Cost Breakdown shows that most processing expenses are not one large payment to the processor. It separates network costs from processor-controlled pricing and shows how reducing the processor portion affects the overall total.
That is what transparent pricing should look like.
We are not promising to eliminate costs established by card networks and issuing banks. We are identifying the areas that may be improved and showing the financial impact clearly.
When a business can see where its money is going, it is in a much stronger position to make a confident processing decision.