By Anand Goel
U.S. merchants will spend over $90 billion in credit card processing or swipe fees in 2019. For many organizations, these fees represent one of their top five operating costs.
Swipe fees continue to grow, not only due to an increase in card sales, but also due to increases in interchange and network fees. Just last month, Visa and MasterCard announced significant increases in certain interchange categories and cross-border fees. Some merchants will see their swipe costs increase by up to 5 percent from May 2018 to May 2019 simply due to fee increases.
It has become imperative for treasury leaders to reign in out-of-control card processing costs. Passive management of this expense category isn’t an option for organizations seeking efficiencies and competitive advantage. Managing swipe fees is a process like any other process inside a company. And like any process, it can be made more efficient and cost-effective using a methodical approach, as well as analytics.
At AFP 2019 in Boston, I’ll be moderating the educational session, Reducing Payment Fees Isn’t Just a Fad, which will delve into best practices used by Tiffany & Co and Kering Americas (parent of luxury brands like Gucci, Saint Laurent, Bottega Veneta, Balenciaga, Alexander McQueen, and Brioni). The treasury leaders from these iconic, global brands will share their framework and journey on optimizing payments. They will share their perspective on many topics, including merchant services RFPs, consolidating providers, interchange optimization, alternative payments, reconciliation, and BIN analysis to better understand customers.
TAKE THE NEXT STEP
Remember, the payments optimization journey isn’t complete for Tiffany & Co and Kering, but they have made significant progress in the last few years. Finance leaders should attend our session to learn about payments successes, failures and priorities for the future of these organizations.