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Who earns what on a USD 100 credit card payment in the US

You run the case. Read the prompt, answer questions from the notes below, and share data only when the candidate asks for it or gets stuck. Score at the end.

Case timer

00:00

Target length:

1. Read the prompt aloud

Read it slowly, then pause. Let the candidate ask questions before they structure.

A shopper in the US pays USD 100 with a rewards credit card. The merchant pays a merchant discount rate of 2.5 percent. Interchange is 1.8 percent and scheme fees are 0.15 percent of the sale. The acquirer's processing and support cost is USD 0.20. The issuer gives 1 percent back to the shopper as rewards, loses about USD 0.10 to fraud, and spends USD 0.15 on processing. How much does each party keep?

2. Answers to clarifying questions

This case has no scripted clarifying answers. Answer from the prompt, and say "assume what you think is reasonable" if the prompt does not cover it.

3. A model structure

Compare the candidate's structure with this one. A different split can be just as good if it is clean and fits the problem.

Split the merchant fee
- Merchant fee = sale x MDR
- Acquirer keeps MDR minus interchange minus scheme fees, then pays its costs
- Issuer keeps interchange minus rewards, fraud, and processing

4. The working, step by step

Each step shows how a strong candidate works it out. Share a new fact from it only when the candidate asks or is stuck, and let them do the math: the result in the dark box is what they should reach.

Step 1: Merchant fee
What a strong candidate does: 2.5 percent of USD 100.
Merchant fee (USD): 100 × 0.025 = 2.5
Step 2: Interchange to the issuer
What a strong candidate does: 1.8 percent of USD 100.
Interchange (USD): 100 × 0.018 = 1.8
Step 3: Acquirer net revenue
What a strong candidate does: Merchant fee minus interchange minus scheme fees of USD 0.15.
Acquirer net revenue (USD): 2.5 - 1.8 - 0.15 = 0.55
Step 4: Acquirer contribution
What a strong candidate does: Subtract the processing and support cost.
Acquirer contribution (USD): 0.55 - 0.2 = 0.35
Step 5: Issuer contribution
What a strong candidate does: Interchange minus rewards of USD 1.00, fraud of USD 0.10, and processing of USD 0.15.
Issuer contribution (USD): 1.8 - 1 - 0.1 - 0.15 = 0.55

The recommendation to listen for

At the end, say: "The CEO walks in. What is your recommendation?"

On a USD 100 card payment each party keeps well under 1 percent, so each should compete on volume and cost per transaction. First, of the USD 2.50 the merchant pays, the issuer receives USD 1.80 but gives USD 1 back as rewards and keeps about USD 0.55 after fraud and processing. Second, the acquirer keeps USD 0.55 of net revenue and USD 0.35 after its own costs, while the scheme earns USD 0.15. The risk is regulation: interchange caps, such as those in the EU, would cut the issuer's income sharply. As a next step, track cost per transaction against volume for each party.

Risks a strong answer names: Interchange caps, such as those in the EU, would cut the issuer's income sharply; Large merchants negotiate lower fees; Real-time account payments can replace cards for some purchases.

Score the candidate

Score each criterion from 1 to 5. A 2 or a 4 sits between the descriptions.

This case has no exhibit. Score Exhibit reading on how the candidate used the data you gave them: did they pick out the number that matters and say what it means?

Structuring

1: No clear structure, or a memorized framework that does not fit the problem.
3: A sensible structure, but with some overlap, a gap, or no clear priority.
5: A structure built for this problem, with no overlap and no gaps, a stated hypothesis, and a clear first step.

Math

1: Frequent errors, no units, or needed heavy help to finish.
3: Right answers but slow or messy working, or one error caught late.
5: Accurate and clearly narrated, with units, a sense check, and what the number means.

Exhibit reading

1: Read the chart aloud without finding the number that matters.
3: Found the key number but gave only part of the so-what.
5: Pulled the right number quickly and said what it means for the case.

Synthesis

1: Summarized what was done, with no clear answer.
3: Gave an answer, but with weak reasons or no next step.
5: Answer first, then two or three reasons with numbers, the main risk, and next steps.

Communication

1: Hard to follow: long silences, no signposting.
3: Clear most of the time, with some rambling.
5: Calm and concise, signposted each step, and checked in with the interviewer.

Total

0 out of 25

Score all five criteria to see the band and the feedback template.