Scheme passthrough is one of the recurring heads of claim the firm engages on. The mechanic is straightforward in principle and obscure in practice — which is precisely why merchant entitlements under this head are often lost in the PSP-to-merchant flow without the merchant noticing.
What scheme passthrough is
Visa, Mastercard and the other card schemes operate proprietary clearing and settlement systems. Within those systems, fees, fines, reversals and recoveries flow continuously between schemes, acquirers, issuers and merchants. When a fine, fee or assessment is reversed by the scheme — because the underlying determination is altered, or because a periodic recalculation shifts the position — the corresponding amount is returned through the chain. That return is the scheme passthrough.
The contractual position in most merchant services agreements is that scheme passthrough belongs to the merchant. The PSP is the routing infrastructure; it is not the economic beneficiary of recoveries that originated as merchant-borne costs.
Where it goes missing
Scheme passthrough goes missing in four characteristic places. Each is worth recognising on a file:
- Aggregation at the acquirer. The acquirer receives a periodic credit from the scheme covering multiple programmes and multiple merchants. Where the acquirer does not perform a clean disaggregation, individual merchant entitlements are pooled and never distributed.
- Reserve absorption. The PSP applies scheme passthrough credits against the merchant's rolling reserve rather than crediting them to the settlement account. The merchant sees the reserve balance increase, but does not see the underlying credit as a discrete line.
- Statement opacity. Monthly statements aggregate scheme-side activity in ways that prevent reconciliation. The firm has reviewed statements from a wide range of European acquirers that show net rather than gross scheme activity, with no breakdown.
- Termination-window absorption. Where the merchant relationship has terminated, scheme passthrough that lands after the termination date is sometimes treated as belonging to the PSP. The contractual position is almost always to the contrary.
What documentary record makes a claim engageable
The firm engages on scheme passthrough claims where the documentary record allows the merchant-side and PSP-side positions to be reconciled to the line. The components that typically matter are:
- The executed merchant services agreement, including the schedule recording scheme passthrough treatment.
- Monthly statements from the PSP for the relevant period, with line-level detail or a separately available transaction file.
- Scheme correspondence — where the merchant has direct visibility — recording programme fines, reversals and recoveries.
- Internal merchant ledger entries reflecting expected versus received passthrough.
Where one or more of these components is missing, the firm can frequently reconstruct the picture from adjacent evidence; gaps are not in themselves disqualifying.
Quantum profile
Scheme passthrough quantum is unpredictable. On some files it is the dominant head of claim; on others it is a supporting line that strengthens a withheld-balance or rolling-reserve case. As a rule of thumb, where a merchant has operated under scheme integrity programmes — for example the Visa Integrity Risk Programme — for any sustained period, the passthrough exposure is material and worth indexing.
The recovery posture
Scheme passthrough is rarely the sole head pursued. It usually sits alongside withheld settlement balance, rolling reserve and contested deduction lines in a consolidated demand. Treated together, the heads support a single anchor position calibrated to the documentary record, against which settlement is negotiated.