Managing the cost of payment transactions can significantly enhance profitability. Numerous studies show that transaction fees represent a substantial share of a company’s operational expenses. In today’s economic climate, it’s more crucial than ever to adopt efficient strategies to reduce these costs.
We asked Aude Vicaire, CEO of Market Pay Tech, for her advice to retailers who want to keep a close eye on their payment cost strategy.
1. Opt for a unified payment platform
Managing several independent payment providers—such as one for each sales channel—can lead to hidden costs, operational errors, and added complexity. A unified payment platform centralizes all transactions and allows for better cost control through a single partner or a limited number of providers.
The benefits of such an approach include:
Simplified vendor management, reducing project timelines, contract handling, and supplier relationships
Streamlined financial flows, minimizing errors and processing delays
The ability to offer innovative use cases and a consistent shopping experience across all channels
By using an all-in-one payment platform like Market Pay, companies can optimize financial resources while improving the user experience.
2. Implement intelligent transaction routing
Optimizing transaction routing can significantly reduce costs by dynamically selecting the most advantageous acquirer or payment method. A smart system analyzes multiple parameters in real time—such as acceptance rates and processing fees—to route each transaction to the most cost-effective option. It also strengthens resilience in the event of an acquirer’s failure.
With this approach, companies can:
Lower acquisition costs by routing to the best available option
Improve payment conversion rates
Adapt their payment strategy based on market conditions and the best-performing local methods
By choosing a partner that enables customized routing strategies, businesses can maximize payment efficiency and cut unnecessary costs.
3. Improve international payment management
International transactions can incur high fees, especially due to charges linked to non-EU card usage.
Solutions like Dynamic Currency Conversion (DCC) allow merchants to recover part of the transaction cost from a card issued in a non-Euro country. DCC also offers a transparent customer experience, as users can see the transaction amount in their local currency in real time.
Another approach is surcharging, where an additional fee is added for non-European cards. In this case, the merchant is not impacted by the higher fees—it’s the customer who pays slightly more to cover the costs associated with their card. However, surcharging is not permitted in all countries, so it’s essential to check with your payment provider.
4. Leverage local payment networks
Integrating local payment networks helps reduce transaction costs, especially by avoiding extra fees from international card schemes. Not only does this allow merchants to offer payment methods aligned with consumer habits in each country—thereby improving acceptance rates—but it also decreases transaction fees.
In Europe, systems like Cartes Bancaires in France, BankAxept in Norway, or Bancomat in Italy meet both consumer expectations and European network objectives. They also empower merchants to negotiate lower fees with international networks.
5. Offer alternative payment methods
Lastly, consider offering alternative payment options such as account-to-account payments or local solutions. Acceptance rates increase when consumers can use their preferred payment method, and fees can be significantly reduced.
It’s also possible to encourage consumers to choose specific payment methods by offering incentives such as loyalty points or promotional offers.
Conclusion
Optimizing transaction costs is a strategic lever for improving profitability. By adopting innovative solutions like smart routing, a unified payment platform, efficient international payment management, and the integration of local or alternative payment methods, companies can significantly lower expenses while boosting performance.
With Market Pay’s solutions, you can implement these strategies efficiently and securely.
To learn more and discover how we can help you optimize your payments, contact us today.
