The top seven credit card issuers in the U.S. saw larger profits in 2011 than in 2010. These profits are coming from an increasing use of credit cards by consumers. Every time a consumer uses their credit card, a merchant pays a fee to process that card. Some cards carry a higher processing fee than others and merchants end up paying various fees for processing credit card transactions. These fees add up quickly and take a bite out of the merchant’s bottom line while adding to an issuer’s profit margins.
Merchants can reduce the fees they pay for processing these transactions if they educate themselves on the industry and understand what fees are necessary and which are not. Since the industry is complex and rates are constantly changing, it can be a difficult task. Some merchants seek outside help in reducing their payment processing costs while others try to tackle it themselves. Whichever method merchants decide to utilize, they need to recognize the savings potential as evidenced by the issuer’s increasing profits.
January 2012 Nilson Report
