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The Cost of Payments

The cost of payments is an elusive and mysterious topic. There is hardly a mention on the web, no clear definition or explanation found.

The cost of payments is a double-edged sword. On one hand, it is a necessary evil and on the other, a formidable revenue driver. Regardless of which side you are on, you ought to know how to qualify and quantify costs. It is an important metric to watch. Improving cost efficiency is not optional and can be time-consuming, so plan ahead and review often.

The costs are essentially fees you pay to the processor, network and card issuers in order to do business. For the purpose of this post, we will focus on online acceptance of cards. Although the definition is pretty straightforward, there are many nuisances to it. The devil is definitely in the details.

Understanding costs is the first step; the environment t ...

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