Cost Allocation Service
When Every Program Deserves Its Own Cost Truth
For issuers running multiple card programs — and especially for BIN Sponsors managing a portfolio of fintech clients — the inability to accurately allocate scheme fees is more than an accounting inconvenience. It's a direct threat to profitability. Scheme invoices arrive as a single consolidated bill, but your business operates across dozens of programs, products, and clients, each with a completely different cost profile. Without accurate allocation, you're essentially flying blind — cross-subsidising some programs at the expense of others, under-charging clients, and making strategic decisions on fundamentally flawed numbers.
Scheme invoices from Visa and Mastercard provide no native breakdown by program, client, or subsidiary — leaving issuers and BIN Sponsors to manually apportion costs using methods that are often arbitrary, inconsistent, and indefensible
For BIN Sponsors, inaccurate cost allocation means scheme fees are routinely under-recovered from fintech clients — a problem that compounds with every new program onboarded and every scheme fee increase
Issuers with multiple product lines — debit, credit, prepaid, commercial — face wildly different cost profiles per program, meaning blended allocation approaches systematically distort P&L performance at the product level
Without granular, rules-based allocation, pricing decisions for new programs are based on averages rather than actuals — almost guaranteeing margin leakage from day one
Our Approach
Pinnacle's Cost Allocation Service brings structure, transparency, and precision to what is — for most issuers, acquirers, and BIN Sponsors — one of the most persistently unsolved problems in payments finance. The service can be delivered as a one-time engagement to establish the right framework, or as an ongoing managed service that keeps allocation accurate as your business and scheme fee structures evolve. It runs across four distinct workstreams.
Fee Ingestion & Classification The starting point is getting complete, accurate sight of every fee being charged by Visa and Mastercard — classified in a way that makes downstream allocation meaningful. Pinnacle ingests your full scheme invoice data and maps every line item into a structured taxonomy that distinguishes fixed from variable costs, issuing from acquiring, and scheme core fees from processing and behavioural charges.
Allocation Model Design & Configuration No two clients have the same program structure, commercial agreements, or internal reporting requirements — which means allocation rules must be built to reflect your specific reality. Pinnacle designs and configures a customisable allocation model that applies the right methodology to each fee type, ensuring every cost lands in the right place for the right reason.
Validation, Reconciliation & Quality Assurance An allocation model is only as good as its outputs — and outputs need to be verifiable. Pinnacle builds reconciliation checks into the model to ensure that allocated costs always tie back to actual scheme invoices, and that movements in fees from month to month are explainable at the program level.
Reporting, Integration & Ongoing Management The final workstream turns the allocation model into something the business can actually use — whether that's feeding internal P&L reporting, informing client billing, or providing the cost transparency needed for confident pricing decisions. For clients who choose the ongoing managed service, Pinnacle operates the model on a monthly basis as scheme invoices are received.
The Results
From Cost Fog to Cost Clarity — With Real Commercial Consequences
For most issuers, acquirers, and BIN Sponsors, accurate scheme fee allocation has always been the problem they know they have but never quite get around to solving. Pinnacle's Cost Allocation Service fixes that — and the commercial impact is immediate, measurable, and lasting. Clients don't just get better numbers; they get a fundamentally different ability to run, price, and grow their business with confidence.
Dramatically improved cost recovery — BIN Sponsors and program managers who implement Pinnacle's allocation model consistently see fee recovery rates from fintech clients jump materially, in some cases from as low as 67% to above 98%, representing millions of dollars in previously lost revenue recovered on an ongoing annual basis
P&L performance you can actually trust — with costs accurately allocated to program, product, and client level, finance and commercial teams finally have a version of profitability they can make decisions from, eliminating the cross-subsidisation and distorted margins that come with blended or approximate allocation approaches
A scalable foundation for business growth — as new programs are onboarded and scheme fees continue to evolve, the allocation model scales with the business, ensuring that every new client is priced correctly from day one and that fee increases are passed through accurately rather than absorbed silently into margin
Reduced operational burden and audit risk — by replacing manual, spreadsheet-based allocation with a structured, rules-based model backed by a full audit trail, clients significantly reduce the internal effort required each month while simultaneously strengthening their position in any client dispute or regulatory review