Revenue Optimization 1: Authorization rates, fraud and some things you should know about risk management
The latest Interchange fees cap has set the maximum fee charged by the card schemes to:
In real terms, payments experts calculate that merchants can save an average of 25% on existing fees. At least this is the case if your payments service provider passes these savings onto you.
Interchange++ is the most transparent pricing model because you can see exactly what you are being charged on a per-transaction basis.
As an example, based on analysis of Adyen's UK-based merchants with an average transaction value of 100 GBP, we see that savings can be as high as 0.80 GBP per transaction.
Interchange++ pricing is rare in the market. Most merchants are charged using the ‘blended’ pricing structure. Because this combines all elements of the transaction fee into one charge, it is difficult to see if the savings are passed on or not. For more information about both interchange+ and blended pricing, see this blog post.
For more information about the Interchange fees cap, click below:
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