JaJa credit card unexplained closure of account 3 March at 9:58AM in Credit cards 142 replies 40.9K views

WillPS

LunaLater said:

WillPS said:

CliveOfIndia said:

kipsterno1 said:

I haven't paid a penny in interest which might be why they nolonger want me as a customer. 

This in itself would not usually be a trigger for account closure.  Whilst interest paid by a customer is of course welcome for a lender, credit card issuers receive plenty of income from the fees they charge the retailer every time you use the card.  If you use the card regularly and always pay in full every month, they get a nice steady income stream with none of the costs associated with having to chase (potentially) bad debt.

No, they don't. Mastercard/Visa issuers don't charge the merchant a penny, ever.

Mastercard/Visa charge what is known as 'interchange'. For UK credit cards this is capped at 0.3% (when used within the UK).

They may pay some of this to the issuer by way of commission, but even if they didn't keep any and passed the whole lot on 0.3% is not a plentiful source of revenue.

To put it in to perspective, the cost of getting a physical credit card to the customer is something like £5. Even if the issuer got 100% of that interchange revenue (which they never would, as then Visa/Mastercard would earn zero), it would take £1666.67 worth of spend just to cover that one simple cost.

That doesn’t seem to be correct.

https://startups.co.uk/payment-processing/credit-card-processing-fees/

Those charges are between the merchant and their acquiring bank. They will include interchange (@ 0.3% for all consumer Visa and Mastercard credit cards), but none of the rest of it will be passed to Visa or Mastercard (and thus the issuer).

LunaLater

WillPS said:

LunaLater said:

WillPS said:

CliveOfIndia said:

kipsterno1 said:

I haven't paid a penny in interest which might be why they nolonger want me as a customer. 

This in itself would not usually be a trigger for account closure.  Whilst interest paid by a customer is of course welcome for a lender, credit card issuers receive plenty of income from the fees they charge the retailer every time you use the card.  If you use the card regularly and always pay in full every month, they get a nice steady income stream with none of the costs associated with having to chase (potentially) bad debt.

No, they don't. Mastercard/Visa issuers don't charge the merchant a penny, ever.

Mastercard/Visa charge what is known as 'interchange'. For UK credit cards this is capped at 0.3% (when used within the UK).

They may pay some of this to the issuer by way of commission, but even if they didn't keep any and passed the whole lot on 0.3% is not a plentiful source of revenue.

To put it in to perspective, the cost of getting a physical credit card to the customer is something like £5. Even if the issuer got 100% of that interchange revenue (which they never would, as then Visa/Mastercard would earn zero), it would take £1666.67 worth of spend just to cover that one simple cost.

That doesn’t seem to be correct.

https://startups.co.uk/payment-processing/credit-card-processing-fees/

Those charges are between the merchant and their acquiring bank. They will include interchange (@ 0.3% for all consumer Visa and Mastercard credit cards), but none of the rest of it will be passed to Visa or Mastercard (and thus the issuer).

It’s really not clear which point you are trying to make here, the queasy ion was about the issuer, who do charge fees, not about Mastercard themselves.

WillPS

LunaLater said:

WillPS said:

LunaLater said:

WillPS said:

CliveOfIndia said:

kipsterno1 said:

I haven't paid a penny in interest which might be why they nolonger want me as a customer. 

This in itself would not usually be a trigger for account closure.  Whilst interest paid by a customer is of course welcome for a lender, credit card issuers receive plenty of income from the fees they charge the retailer every time you use the card.  If you use the card regularly and always pay in full every month, they get a nice steady income stream with none of the costs associated with having to chase (potentially) bad debt.

No, they don't. Mastercard/Visa issuers don't charge the merchant a penny, ever.

Mastercard/Visa charge what is known as 'interchange'. For UK credit cards this is capped at 0.3% (when used within the UK).

They may pay some of this to the issuer by way of commission, but even if they didn't keep any and passed the whole lot on 0.3% is not a plentiful source of revenue.

To put it in to perspective, the cost of getting a physical credit card to the customer is something like £5. Even if the issuer got 100% of that interchange revenue (which they never would, as then Visa/Mastercard would earn zero), it would take £1666.67 worth of spend just to cover that one simple cost.

That doesn’t seem to be correct.

https://startups.co.uk/payment-processing/credit-card-processing-fees/

Those charges are between the merchant and their acquiring bank. They will include interchange (@ 0.3% for all consumer Visa and Mastercard credit cards), but none of the rest of it will be passed to Visa or Mastercard (and thus the issuer).

It’s really not clear which point you are trying to make here, the queasy ion was about the issuer, who do charge fees, not about Mastercard themselves.

I was replying to @CliveOfIndia who was asserting the oft-repeated myth that card issuers make a healthy return from low-normal spending when paid in full (so no interest) because of the fees merchants pay.

It's a common misunderstanding that fees merchants pay are passed on to the card issuers, when actually none of it does directly, and the total slice which could even potentially get to them is the interchange fee which is capped at 0.3% (which is the total revenue for both Visa/Mastercard AND the issuer). 

I didn't say the merchants don't pay fees, as that'd be plainly untrue.

CliveOfIndia

WillPS said:

LunaLater said:

WillPS said:

LunaLater said:

WillPS said:

CliveOfIndia said:

kipsterno1 said:

I haven't paid a penny in interest which might be why they nolonger want me as a customer. 

This in itself would not usually be a trigger for account closure.  Whilst interest paid by a customer is of course welcome for a lender, credit card issuers receive plenty of income from the fees they charge the retailer every time you use the card.  If you use the card regularly and always pay in full every month, they get a nice steady income stream with none of the costs associated with having to chase (potentially) bad debt.

No, they don't. Mastercard/Visa issuers don't charge the merchant a penny, ever.

Mastercard/Visa charge what is known as 'interchange'. For UK credit cards this is capped at 0.3% (when used within the UK).

They may pay some of this to the issuer by way of commission, but even if they didn't keep any and passed the whole lot on 0.3% is not a plentiful source of revenue.

To put it in to perspective, the cost of getting a physical credit card to the customer is something like £5. Even if the issuer got 100% of that interchange revenue (which they never would, as then Visa/Mastercard would earn zero), it would take £1666.67 worth of spend just to cover that one simple cost.

That doesn’t seem to be correct.

https://startups.co.uk/payment-processing/credit-card-processing-fees/

Those charges are between the merchant and their acquiring bank. They will include interchange (@ 0.3% for all consumer Visa and Mastercard credit cards), but none of the rest of it will be passed to Visa or Mastercard (and thus the issuer).

It’s really not clear which point you are trying to make here, the queasy ion was about the issuer, who do charge fees, not about Mastercard themselves.

I was replying to @CliveOfIndia who was asserting the oft-repeated myth that card issuers make a healthy return from low-normal spending when paid in full (so no interest) because of the fees merchants pay.

It's a common misunderstanding that fees merchants pay are passed on to the card issuers, when actually none of it does directly, and the total slice which could even potentially get to them is the interchange fee which is capped at 0.3% (which is the total revenue for both Visa/Mastercard AND the issuer). 

I didn't say the merchants don't pay fees, as that'd be plainly untrue.

This surely wouldn't make financial sense?  Let's say for the sake of argument that Santander has 1 million Mastercards being used by its customers.  A large proportion of those customers spend on the card regularly and always repay in full every month.  If your assertion is correct (i.e. Santander receives little or no income from these customers), why do they allow the customers to keep the cards?  Why don't they just close the accounts for those customers, and only keep customers who are paying interest?

Surely it must be worthwhile for Santander to keep these customers, and they must be making more income than what it costs them to provide the credit facility?  Otherwise they (and every other bank) would be closing the accounts of every customer who doesn't pay interest.

WillPS

CliveOfIndia said:

WillPS said:

LunaLater said:

WillPS said:

LunaLater said:

WillPS said:

CliveOfIndia said:

kipsterno1 said:

I haven't paid a penny in interest which might be why they nolonger want me as a customer. 

This in itself would not usually be a trigger for account closure.  Whilst interest paid by a customer is of course welcome for a lender, credit card issuers receive plenty of income from the fees they charge the retailer every time you use the card.  If you use the card regularly and always pay in full every month, they get a nice steady income stream with none of the costs associated with having to chase (potentially) bad debt.

No, they don't. Mastercard/Visa issuers don't charge the merchant a penny, ever.

Mastercard/Visa charge what is known as 'interchange'. For UK credit cards this is capped at 0.3% (when used within the UK).

They may pay some of this to the issuer by way of commission, but even if they didn't keep any and passed the whole lot on 0.3% is not a plentiful source of revenue.

To put it in to perspective, the cost of getting a physical credit card to the customer is something like £5. Even if the issuer got 100% of that interchange revenue (which they never would, as then Visa/Mastercard would earn zero), it would take £1666.67 worth of spend just to cover that one simple cost.

That doesn’t seem to be correct.

https://startups.co.uk/payment-processing/credit-card-processing-fees/

Those charges are between the merchant and their acquiring bank. They will include interchange (@ 0.3% for all consumer Visa and Mastercard credit cards), but none of the rest of it will be passed to Visa or Mastercard (and thus the issuer).

It’s really not clear which point you are trying to make here, the queasy ion was about the issuer, who do charge fees, not about Mastercard themselves.

I was replying to @CliveOfIndia who was asserting the oft-repeated myth that card issuers make a healthy return from low-normal spending when paid in full (so no interest) because of the fees merchants pay.

It's a common misunderstanding that fees merchants pay are passed on to the card issuers, when actually none of it does directly, and the total slice which could even potentially get to them is the interchange fee which is capped at 0.3% (which is the total revenue for both Visa/Mastercard AND the issuer). 

I didn't say the merchants don't pay fees, as that'd be plainly untrue.

This surely wouldn't make financial sense?  Let's say for the sake of argument that Santander has 1 million Mastercards being used by its customers.  A large proportion of those customers spend on the card regularly and always repay in full every month.  If your assertion is correct (i.e. Santander receives little or no income from these customers), why do they allow the customers to keep the cards?  Why don't they just close the accounts for those customers, and only keep customers who are paying interest?

Surely it must be worthwhile for Santander to keep these customers, and they must be making more income than what it costs them to provide the credit facility?  Otherwise they (and every other bank) would be closing the accounts of every customer who doesn't pay interest.

Santander, like all retail banks, also offer a range of current accounts which are either completely free day to day or marketed to actually pay their customers.

How do you suggest these activities make 'financial sense'?

The answer is that:

1. X% of customers will become liable for charges - in the case of current accounts overdrafts and fees (i.e. FX).
2. X% of customers will eventually seek more profitable services from the bank on the basis of the existing relationship - loans, savings, investments, mortgages etc
3. (Not applicable to pure lenders like Jaja or NewDay) X% of customers will leave a reasonably high balance which they'll pay little interest on
   

They will get some revenue from debit card use but given the interchange rate for these is capped at 0.2%, once Visa/Mastercard have taken their cut you can assume they're getting nearly nothing - and everytime the customer uses it at a LINK ATM or Post Office they'll also be charged 10-50p which they'll have to swallow. The customer would have to spend *a lot* on their debit card for this element of the account to be profitable.

It's a peculiar business, frankly; but it's the way the UK market works.

Interesting that you choose Santander tho, because they are a little more transparent in their efforts to make even these (often loss leading) products profitable:

1. The current accounts they mostly market have a fee associated with them, and incentivise customers to hold a higher balance (which they can make a profit on with the base rate as it is).
2. One of their two mainstream credit cards they offer carries an unavoidable monthly fee of £3/month
3. They are one of the lenders who are most keen to not reissue debit or credit cards unless they can see recent history of them being used (this costs them £5ish a pop remember)
4. They are quite forcefully marketing their (rubbish) Boosts scheme which, despite appearing to be giving the customer stuff, will be a source of revenue for them too

CliveOfIndia

WillPS said:

CliveOfIndia said:

WillPS said:

LunaLater said:

WillPS said:

LunaLater said:

WillPS said:

CliveOfIndia said:

kipsterno1 said:

I haven't paid a penny in interest which might be why they nolonger want me as a customer. 

This in itself would not usually be a trigger for account closure.  Whilst interest paid by a customer is of course welcome for a lender, credit card issuers receive plenty of income from the fees they charge the retailer every time you use the card.  If you use the card regularly and always pay in full every month, they get a nice steady income stream with none of the costs associated with having to chase (potentially) bad debt.

No, they don't. Mastercard/Visa issuers don't charge the merchant a penny, ever.

Mastercard/Visa charge what is known as 'interchange'. For UK credit cards this is capped at 0.3% (when used within the UK).

They may pay some of this to the issuer by way of commission, but even if they didn't keep any and passed the whole lot on 0.3% is not a plentiful source of revenue.

To put it in to perspective, the cost of getting a physical credit card to the customer is something like £5. Even if the issuer got 100% of that interchange revenue (which they never would, as then Visa/Mastercard would earn zero), it would take £1666.67 worth of spend just to cover that one simple cost.

That doesn’t seem to be correct.

https://startups.co.uk/payment-processing/credit-card-processing-fees/

Those charges are between the merchant and their acquiring bank. They will include interchange (@ 0.3% for all consumer Visa and Mastercard credit cards), but none of the rest of it will be passed to Visa or Mastercard (and thus the issuer).

It’s really not clear which point you are trying to make here, the queasy ion was about the issuer, who do charge fees, not about Mastercard themselves.

I was replying to @CliveOfIndia who was asserting the oft-repeated myth that card issuers make a healthy return from low-normal spending when paid in full (so no interest) because of the fees merchants pay.

It's a common misunderstanding that fees merchants pay are passed on to the card issuers, when actually none of it does directly, and the total slice which could even potentially get to them is the interchange fee which is capped at 0.3% (which is the total revenue for both Visa/Mastercard AND the issuer). 

I didn't say the merchants don't pay fees, as that'd be plainly untrue.

This surely wouldn't make financial sense?  Let's say for the sake of argument that Santander has 1 million Mastercards being used by its customers.  A large proportion of those customers spend on the card regularly and always repay in full every month.  If your assertion is correct (i.e. Santander receives little or no income from these customers), why do they allow the customers to keep the cards?  Why don't they just close the accounts for those customers, and only keep customers who are paying interest?

Surely it must be worthwhile for Santander to keep these customers, and they must be making more income than what it costs them to provide the credit facility?  Otherwise they (and every other bank) would be closing the accounts of every customer who doesn't pay interest.

Interesting that you choose Santander tho, because they are a little more transparent in their efforts to make even these (often loss leading) products profitable:

I guess you're right.  I didn't cite Santander as an example for any reason other than they're well-known.  I could have chosen HSBC, Barclays, Lloyds, RBS, Halifax, Tesco, Sainsburys, any of the dozens of well-known banks.

WillPS

CliveOfIndia said:

WillPS said:

CliveOfIndia said:

WillPS said:

LunaLater said:

WillPS said:

LunaLater said:

WillPS said:

CliveOfIndia said:

kipsterno1 said:

I haven't paid a penny in interest which might be why they nolonger want me as a customer. 

This in itself would not usually be a trigger for account closure.  Whilst interest paid by a customer is of course welcome for a lender, credit card issuers receive plenty of income from the fees they charge the retailer every time you use the card.  If you use the card regularly and always pay in full every month, they get a nice steady income stream with none of the costs associated with having to chase (potentially) bad debt.

No, they don't. Mastercard/Visa issuers don't charge the merchant a penny, ever.

Mastercard/Visa charge what is known as 'interchange'. For UK credit cards this is capped at 0.3% (when used within the UK).

They may pay some of this to the issuer by way of commission, but even if they didn't keep any and passed the whole lot on 0.3% is not a plentiful source of revenue.

To put it in to perspective, the cost of getting a physical credit card to the customer is something like £5. Even if the issuer got 100% of that interchange revenue (which they never would, as then Visa/Mastercard would earn zero), it would take £1666.67 worth of spend just to cover that one simple cost.

That doesn’t seem to be correct.

https://startups.co.uk/payment-processing/credit-card-processing-fees/

Those charges are between the merchant and their acquiring bank. They will include interchange (@ 0.3% for all consumer Visa and Mastercard credit cards), but none of the rest of it will be passed to Visa or Mastercard (and thus the issuer).

It’s really not clear which point you are trying to make here, the queasy ion was about the issuer, who do charge fees, not about Mastercard themselves.

I was replying to @CliveOfIndia who was asserting the oft-repeated myth that card issuers make a healthy return from low-normal spending when paid in full (so no interest) because of the fees merchants pay.

It's a common misunderstanding that fees merchants pay are passed on to the card issuers, when actually none of it does directly, and the total slice which could even potentially get to them is the interchange fee which is capped at 0.3% (which is the total revenue for both Visa/Mastercard AND the issuer). 

I didn't say the merchants don't pay fees, as that'd be plainly untrue.

This surely wouldn't make financial sense?  Let's say for the sake of argument that Santander has 1 million Mastercards being used by its customers.  A large proportion of those customers spend on the card regularly and always repay in full every month.  If your assertion is correct (i.e. Santander receives little or no income from these customers), why do they allow the customers to keep the cards?  Why don't they just close the accounts for those customers, and only keep customers who are paying interest?

Surely it must be worthwhile for Santander to keep these customers, and they must be making more income than what it costs them to provide the credit facility?  Otherwise they (and every other bank) would be closing the accounts of every customer who doesn't pay interest.

Interesting that you choose Santander tho, because they are a little more transparent in their efforts to make even these (often loss leading) products profitable:

I guess you're right.  I didn't cite Santander as an example for any reason other than they're well-known.  I could have chosen HSBC, Barclays, Lloyds, RBS, Halifax, Tesco, Sainsburys, any of the dozens of well-known banks.

Sure, I get it. The truth is that they all have slightly different routes to viability but Visa/Mastercard interchange derived revenue is no longer the gold mine it once was, but interest, fees and retailer-specific comissions (as in when a specific retailer agrees to pay the issuer a commission on spend in exchange for marketing) are in the mix to some extent with all of them.

LunaLater

WillPS said:

LunaLater said:

WillPS said:

LunaLater said:

WillPS said:

CliveOfIndia said:

kipsterno1 said:

I haven't paid a penny in interest which might be why they nolonger want me as a customer. 

This in itself would not usually be a trigger for account closure.  Whilst interest paid by a customer is of course welcome for a lender, credit card issuers receive plenty of income from the fees they charge the retailer every time you use the card.  If you use the card regularly and always pay in full every month, they get a nice steady income stream with none of the costs associated with having to chase (potentially) bad debt.

No, they don't. Mastercard/Visa issuers don't charge the merchant a penny, ever.

Mastercard/Visa charge what is known as 'interchange'. For UK credit cards this is capped at 0.3% (when used within the UK).

They may pay some of this to the issuer by way of commission, but even if they didn't keep any and passed the whole lot on 0.3% is not a plentiful source of revenue.

To put it in to perspective, the cost of getting a physical credit card to the customer is something like £5. Even if the issuer got 100% of that interchange revenue (which they never would, as then Visa/Mastercard would earn zero), it would take £1666.67 worth of spend just to cover that one simple cost.

That doesn’t seem to be correct.

https://startups.co.uk/payment-processing/credit-card-processing-fees/

Those charges are between the merchant and their acquiring bank. They will include interchange (@ 0.3% for all consumer Visa and Mastercard credit cards), but none of the rest of it will be passed to Visa or Mastercard (and thus the issuer).

It’s really not clear which point you are trying to make here, the queasy ion was about the issuer, who do charge fees, not about Mastercard themselves.

I was replying to @CliveOfIndia who was asserting the oft-repeated myth that card issuers make a healthy return from low-normal spending when paid in full (so no interest) because of the fees merchants pay.

It's a common misunderstanding that fees merchants pay are passed on to the card issuers, when actually none of it does directly, and the total slice which could even potentially get to them is the interchange fee which is capped at 0.3% (which is the total revenue for both Visa/Mastercard AND the issuer). 

I didn't say the merchants don't pay fees, as that'd be plainly untrue.

It’s not a myth, and you are wrong. You are getting confused between the issuer and Mastercard. Mastercard are not thé issuer, so why do you keep mentioning them?

Who is it that you think that the 1-3% fees are going to if not the issuer?

WillPS

LunaLater said:

WillPS said:

LunaLater said:

WillPS said:

LunaLater said:

WillPS said:

CliveOfIndia said:

kipsterno1 said:

I haven't paid a penny in interest which might be why they nolonger want me as a customer. 

This in itself would not usually be a trigger for account closure.  Whilst interest paid by a customer is of course welcome for a lender, credit card issuers receive plenty of income from the fees they charge the retailer every time you use the card.  If you use the card regularly and always pay in full every month, they get a nice steady income stream with none of the costs associated with having to chase (potentially) bad debt.

No, they don't. Mastercard/Visa issuers don't charge the merchant a penny, ever.

Mastercard/Visa charge what is known as 'interchange'. For UK credit cards this is capped at 0.3% (when used within the UK).

They may pay some of this to the issuer by way of commission, but even if they didn't keep any and passed the whole lot on 0.3% is not a plentiful source of revenue.

To put it in to perspective, the cost of getting a physical credit card to the customer is something like £5. Even if the issuer got 100% of that interchange revenue (which they never would, as then Visa/Mastercard would earn zero), it would take £1666.67 worth of spend just to cover that one simple cost.

That doesn’t seem to be correct.

https://startups.co.uk/payment-processing/credit-card-processing-fees/

Those charges are between the merchant and their acquiring bank. They will include interchange (@ 0.3% for all consumer Visa and Mastercard credit cards), but none of the rest of it will be passed to Visa or Mastercard (and thus the issuer).

It’s really not clear which point you are trying to make here, the queasy ion was about the issuer, who do charge fees, not about Mastercard themselves.

I was replying to @CliveOfIndia who was asserting the oft-repeated myth that card issuers make a healthy return from low-normal spending when paid in full (so no interest) because of the fees merchants pay.

It's a common misunderstanding that fees merchants pay are passed on to the card issuers, when actually none of it does directly, and the total slice which could even potentially get to them is the interchange fee which is capped at 0.3% (which is the total revenue for both Visa/Mastercard AND the issuer). 

I didn't say the merchants don't pay fees, as that'd be plainly untrue.

It’s not a myth, and you are wrong. You are getting confused between the issuer and Mastercard. Mastercard are not thé issuer, so why do you keep mentioning them?

Who is it that you think that the 1-3% fees are going to if not the issuer?

Why do you think they are?

I am telling you that in a standard transaction (i.e. not an incentivised retailer commission/cashback scenario) the only revenue that the issuer gets is derived from the Interchange Fee.

There is no neccessary relationship between acquiring banks and card issuers - this is the 'value' which Visa/Mastercard provide. That being the case, why and how would the acquiring bank be paying the issuer directly?

Prove me wrong.

CliveOfIndia

WillPS said:

LunaLater said:

WillPS said:

LunaLater said:

WillPS said:

LunaLater said:

WillPS said:

CliveOfIndia said:

kipsterno1 said:

I haven't paid a penny in interest which might be why they nolonger want me as a customer. 

This in itself would not usually be a trigger for account closure.  Whilst interest paid by a customer is of course welcome for a lender, credit card issuers receive plenty of income from the fees they charge the retailer every time you use the card.  If you use the card regularly and always pay in full every month, they get a nice steady income stream with none of the costs associated with having to chase (potentially) bad debt.

No, they don't. Mastercard/Visa issuers don't charge the merchant a penny, ever.

Mastercard/Visa charge what is known as 'interchange'. For UK credit cards this is capped at 0.3% (when used within the UK).

They may pay some of this to the issuer by way of commission, but even if they didn't keep any and passed the whole lot on 0.3% is not a plentiful source of revenue.

To put it in to perspective, the cost of getting a physical credit card to the customer is something like £5. Even if the issuer got 100% of that interchange revenue (which they never would, as then Visa/Mastercard would earn zero), it would take £1666.67 worth of spend just to cover that one simple cost.

That doesn’t seem to be correct.

https://startups.co.uk/payment-processing/credit-card-processing-fees/

Those charges are between the merchant and their acquiring bank. They will include interchange (@ 0.3% for all consumer Visa and Mastercard credit cards), but none of the rest of it will be passed to Visa or Mastercard (and thus the issuer).

It’s really not clear which point you are trying to make here, the queasy ion was about the issuer, who do charge fees, not about Mastercard themselves.

I was replying to @CliveOfIndia who was asserting the oft-repeated myth that card issuers make a healthy return from low-normal spending when paid in full (so no interest) because of the fees merchants pay.

It's a common misunderstanding that fees merchants pay are passed on to the card issuers, when actually none of it does directly, and the total slice which could even potentially get to them is the interchange fee which is capped at 0.3% (which is the total revenue for both Visa/Mastercard AND the issuer). 

I didn't say the merchants don't pay fees, as that'd be plainly untrue.

It’s not a myth, and you are wrong. You are getting confused between the issuer and Mastercard. Mastercard are not thé issuer, so why do you keep mentioning them?

Who is it that you think that the 1-3% fees are going to if not the issuer?

Why do you think they are?

I am telling you that in a standard transaction (i.e. not an incentivised retailer commission/cashback scenario) the only revenue that the issuer gets is derived from the Interchange Fee.

There is no neccessary relationship between acquiring banks and card issuers - this is the 'value' which Visa/Mastercard provide. That being the case, why and how would the acquiring bank be paying the issuer directly?

Prove me wrong.

https://www.fool.co.uk/2019/03/28/how-do-banks-make-money-from-credit-cards/

"Credit card issuers also generate income from charging merchant fees. They are generated when a retailer accepts a credit card payment, with the retailer paying a percentage of the value of the sale to the credit card issuer. This is generally around 1.75% and is called an interchange rate."

"The credit card network also charges retailers a fee per transaction. Networks include Visa and Mastercard, for example, with them charging around 0.12% per transaction."

"Credit cards are a lucrative product for banks and other issuers"

So every time you buy something on your credit card, the issuing bank (Santander, HSBC, RBS, whoever) gets paid a percentage of the transaction value by the retailer.  The network (Visa, Mastercard etc.) also get paid a fee.

This is why very often, for instance, a car dealer will refuse to accept a credit card for anything other than a small deposit.  1.75% (or whatever the fee is for that particular retailer) of £500 isn't too bad, and the dealer is prepared to absorb that.  But 1.75% of £50,000 is a sizeable chunk of cash.