Recent changes to interchange and scheme fees are often measured in basis points, typically in the range of 5-20bps depending on transaction type.
While this appears minor, the effect becomes more significant when applied across large transaction volumes.
For a business processing £50m annually, a 15bps increase equates to an additional £75,000 in cost, without any change in activity.💵🫰
This is now being seen across UK retail and hospitality, where some businesses are experiencing notable increases despite stable volumes.
The underlying reason is often transaction mix. A higher proportion of international customers or increased use of corporate cards brings a more expensive cost profile.
Interchange and scheme fees cannot be negotiated, but margin can.
If costs are rising without a clear operational reason, it may be worth looking more closely at how this is structured:
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https://lnkd.in/ef5kiAcD
Small percentage increases in payment fees are now translating into higher costs for many businesses
