Chapter 5: Optimizing the total cost of payments
34% of businesses are looking to increase net revenue by finding ways to lower the cost of payments
Retailers are increasingly focused on optimizing payment costs. The most effective way to do so is through a holistic strategy that targets savings across the entire payment ecosystem. Whether it's adopting lower-cost payment methods, consolidating vendors, or minimizing fraud, there are significant opportunities to reduce costs - if you know where to look.
In Hong Kong, this focus is particularly sharp: it ranks one of the highest globally for businesses citing fraudulent transactions and chargebacks (40%) as a significant cost. It also leads globally in reporting the financial impact of fraudulent returns, with 44% of businesses calling it a major concern.
Finding 01
Businesses find ways to optimize payment costs
A wealth of cost optimization opportunities can be found in your payment processing. For example, local payment methods can help avoid interchange fees, and smart routing can both reduce costs and increase authorization rates. But these savings will only be achieved if your payment provider passes them on to you (by billing with Interchange++).
Finding 02
Operational inefficiencies are a financial drain
Managing payments on a day-to-day basis can be a significant drain on resources. Retailers often spend hours (even days) each month reconciling transactions across fragmented systems. And the more payment vendors involved, the more complex the web of partnerships, contracts, integrations, and reporting becomes. In Hong Kong, where high rental rates and a manpower shortage put razor-thin margins under even greater pressure, such technological solutions are not just helpful - they’re essential. Streamlining operations and reducing payment complexity isn’t just about efficiency; it’s about survival in one of the world’s most cost-intensive retail landscapes.
Finding 03
Fraud is still top of mind when it comes to cost
Payment fraud is damaging in every sense. It eats into your profit margins and also undermines consumer trust. The extent of fraud varies widely from region to region and across different age groups. But one thing is certain: AI is table stakes in the fight against it.
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