Are you paying too much to your transaction processor?

Credit card transaction processing cost seems to be the most important processing partner selection criterion for many businesses, including both merchants and intermediary entities, such as independent sales organizations (ISOs), payment facilitators, and payment service providers (PSP).

If a company thinks that the fees charged by its current transaction processor are too high, it, usually, follows one of the two approaches. Either it tries to negotiate better processing terms with its current partner (based on its high consolidated processing volume), or it decides to look for a new processor that will offer its services at a lower price.

The problem of high processing costs is extremely relevant for all the listed categories of merchant services industry players, but, somehow, not all companies are able to see the situation from a broader perspective.

Sometimes it might be useful to check, which services you are paying for. In some cases, a company may be paying for some “premium” service package, while not using most of the services. In such a case it might be beneficial to switch to a simpler and cheaper service package offered by a current or a new processor.

However, the general recommendation for any company that wants to reduce costs associated with transaction processing is to approach the problem in a smarter way. Beside costs, directly related to transaction processing (including merchant fees, gateway fees, and, potentially, tokenization costs), there are also indirect costs and opportunity costs. Sometimes, instead of looking for the cheapest transaction processing offering, it might be beneficial to take a closer look at the latter two cost items.

If you want to learn more about transaction cost reduction and other processing-related problems, as well as available solutions, you can read our detailed transaction processing cost reduction guidelines and the guide on fundamentals of payment processing. Both documents are available for free download at

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