Payment Optimization Basics
Understanding the fundamentals of payment processing optimization and how it can save your business money.
Payment Optimization Basics
Payment processing optimization is the practice of reducing the costs associated with accepting payments online. Here's what you need to know.
Understanding Processing Costs
Payment processing involves several types of fees:
- Interchange fees: Paid to card-issuing banks
- Processor fees: Charged by payment processors
- Network fees: Charged by card networks (Visa, Mastercard, etc.)
- FX markups: Applied to cross-border transactions
Common Optimization Strategies
1. Commercial Card Steering
Commercial cards typically have higher processing fees (1.0-1.5% vs 0.3-0.5% for consumer cards). By detecting commercial cards early and routing them to lower-cost methods like SEPA Instant, you can save significantly.
2. Payment Method Optimization
Encouraging customers to use lower-cost payment methods (like SEPA Instant for EUR payments) can reduce your overall processing costs.
3. Processor Selection
Different processors offer different rates for different transaction types. Using multiple processors and routing transactions optimally can save money.
Getting Started
Ready to optimize your payment processing? Contact us to learn more about how margin/ can help.