How to Reduce Your Transaction Fees Without Changing Your Payment Provider

Transaction fees are one of the most accepted costs in e-commerce. Most businesses treat them as fixed. They're not.

For example, for a business processing $5 million annually, a 0.3% reduction in blended transaction fees is $15,000 back per year, without changing a product, reducing headcount or renegotiating a single contract. At $20 million, that's $60,000.

Here are the four levers that move transaction fees down, and what it takes to pull each one.

1. Smart routing

This is the highest-impact lever and the one most businesses don't have access to without an orchestration platform.

Not every transaction costs the same to process. A domestic Visa debit card processed through your Australian gateway is cheaper than an international Mastercard credit card processed through the same gateway. A transaction in AUD is cheaper to process locally than to process offshore in another currency.

Smart routing sends each transaction to the eligible provider that will cost you least, based on the rates you enter for each provider. This happens automatically, for every payment.

2. Provider competition

When you rely on one gateway, you have little room to negotiate. When you have multiple providers connected to an orchestration platform, you have options, and the ability to act on them.

Connecting a second provider is much simpler when your orchestration platform handles the integration. It also gives you a clearer basis for pricing conversations with your existing provider, because you can compare what each provider costs for your own volume.

3. Recovering declined payments

When a decline is temporary, failover retries the payment once through a backup provider you nominate. If a provider declines a transaction and you lose the sale, you pay nothing but you also earn nothing. If the retry succeeds through the backup provider at a slightly higher fee, you've still come out ahead.

4. Visibility and reconciliation

You can't reduce what you can't see. Many businesses discover they're overpaying on fees only when they audit their statements, which takes days and requires reconciling data across multiple providers in different formats.

Centralised reporting through an orchestration platform gives you a single view of every transaction across every provider. With payFURL, costs are shown based on the rates you enter for each provider, so you can compare providers side by side.