Work Through Card Unit Economics
Calculate risk-adjusted contribution for a single card transaction.
A debit card program processes a $100 purchase. The company receives 1.10% gross revenue share, pays $0.42 in network and processor costs, gives $0.30 in rewards, books $0.18 fraud and chargeback reserve, and allocates $0.06 support cost. Unit economics = gross revenue minus variable cost minus risk reserve. The common mistake is calling interchange share profit before subtracting costs that scale with transaction volume. Step 1 Gross revenue: $100 x 1.10% = $1.10. Start with the revenue stream, but do not stop there. Step 2 Subtract network and processor costs: $1.10 - $0.42 = $0.68. External rails are part of…
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