The Transaction fees charged is niether pocketed by the bank or the merchant. It is a royalty paid to the solution provider(EMV) for a secure transaction thru a card on a POS machine. There is a % levied by the solution provider to the bank which may be one time payment or per transaction(norm nowadays).These % varies and the bank passes this to the merchant who in turn passes this on the the helpless customer. There may be instances where bank takes a margin over and above the % charged by the solution provider. Acceptable if it is within the operating cost of the bank. But if the bank charges more than that then we should have a regualtion in place for this.
