A basis point (bp) is one hundredth of one percent: 1 bp = 0.01%, and 100 bps = 1%. On $100,000 of volume, one basis point is $10. Payment economics — processing margins, program funding, platform fees — are quoted in basis points because the percentages involved are small and precision matters.
Basis points make small-margin arithmetic legible. A rewards program funded by “10 to 20 bps of settled volume” costs $10–$20 per $10,000 processed — the kind of slice that fits inside a 3.50%–3.99% cash-discount rate without changing what the merchant pays.