For credit cards, some of the cost is prepaid interest. If a consumer pays their card on time, they don't get charged interest--however the bank loaned them mo

For credit cards, some of the cost is prepaid interest. If a consumer pays their card on time, they don't get charged interest--however the bank loaned them money from the day of the transaction until they either get paid with the same billing cycle, or they start officially charging the consumer interest (which can take up to 60 days). The merchant pays this interest, which is high. Debit cards are another matter.