The Smart Business Owner’s Guide to Payment Processing

Payment processing fees are quietly becoming one of your largest operating expenses. With $111B collected by Visa and Mastercard networks in 2024 – growing ~4x faster than inflation – the time for payment optimization is now.

Why Fees Keep Rising

Every card transaction fee has three layers (share of total processing cost):

• Interchange (70-90%): paid to the issuing bank; rate depends on card type, channel, ticket size, and MCC
• Scheme / Network fees (5-10%): base assessment plus small per transaction charges (tokenization, cross-border, etc.)
• Processor markup (5-15%): your payment provider’s margin, PCI, and support fees

The Real Impact on Your Business

• Startups and small businesses: 2-3% of revenue lost to fees can erase weeks of precious runway
• Established businesses: Millions off the P&L each year

Whether you’re processing $100K or $100M annually, every basis point saved flows directly to your bottom line.

Four Ways to Take Control

1. Pass fees to card users, where legal
Let customers who choose premium payment methods cover the associated costs. Most businesses see immediate margin improvement.

2. Incentivize lower-cost payment methods
Offer ACH discounts or loyalty perks.

3. Optimize your interchange
Ensure you’re qualifying for the lowest rate codes through proper capture, tokenization, MCC, and clearing practices.

4. Keep processors competitive
Regular market checks ensure you’re not overpaying as competitors improve their offerings.

The Bottom Line

Smart business owners don’t accept payment fees as fixed costs. They treat payment processing as a strategic function that directly impacts profitability.

The businesses winning in today’s environment are those implementing systematic approaches to payment cost management – measuring performance, optimizing based on data, and continuously refining their strategy.

Yeeld helps businesses implement intelligent payment optimization strategies that reduce costs while improving customer experiences.

Ready to see what you could be saving?

Reach out to Yeeld at sales@theyeeld.com.