Payments Steering – 3 Tools to Reduce Your Payments Cost
For US merchants, card acceptance costs have become one of the fastest-growing line items of the P&L. Credit card interchange and network fees routinely consume 2–3% of revenue—and nothing about the current environment suggests that’s going to improve on its own.
But merchants aren’t powerless. A new generation of cost-reduction strategies is giving merchants—and others in the merchant acquiring value chain—practical options to reduce what they pay to get paid.
I had the privilege of moderating the recent NYPAY webinar – Paying Less to Get Paid: Practical Strategies for Reducing the Cost of Card Acceptance that addressed this issue in detail.
Nagendra Jayanty – CEO InterPayments, Matt Brennan, President and Chief Commercial Officer Spire – Pay with Spire, Inc. and Lou Morsberger, Founder and CEO of Payments Strategy Consulting, LLC joined me for a robust discussion on:
- Compliant Surcharging – NJ discussed how merchants can pass card fees to cardholders while staying fully within card network rules and state law. He covered how precise, managed surcharging programs are working in practice—from SMBs to Fortune 1000 companies—and what compliance really requires.
- Lou brought us up to speed on the Visa / MC Antitrust proposed settlement and discussed Interchange Buying Groups – particularly how merchants can aggregate payment volume to negotiate better interchange and processing rates—the collective bargaining approach to acceptance economics that’s gaining traction across verticals.
- Matt discussed Pay by Bank 2.0 – The new generation of account-to-account (A2A) payment solutions that bring card-like checkout experiences with bank-transfer economics. Including loyalty-integrated models that let merchants turn lower acceptance costs into customer rewards—without changing how consumers pay.
My biggest take away from the session is that each of these payment steering tools can enable cost savings on their own, but when viewed as a “tool kit” can be complementary and even more powerful when used together.
We also noted that each business and use case within a business is unique. Not all tools fit all jobs. To truly understand how to best optimize payment costs, merchants need to first understand the tools available to them and then conduct an analysis of the optimal payment steering tools to deploy.
The Payments Roundup team stands ready to help you evaluate your options and start building your cost-optimized payment platform. Contact us at info@payments-roundup.com
Check out the complete, unedited video of the panel discussion here: https://www.youtube.com/watch?v=8GPSte1AA0Y