Interchange fees’ staying power

High credit card swipe fees are likely here to stay. While merchants continue to fight these costs in court and through legislation, consumer behavior is the primary obstacle. Shoppers love their reward points and the convenience of plastic. This makes it very difficult for retailers to steer customers toward cheaper payment methods without risking lost sales. For your business, this means interchange fees will continue to eat into your margins for the foreseeable future. The legal battles against Visa and Mastercard offer occasional settlement wins, but they rarely change the fundamental cost structure of accepting credit cards. Many merchants are now looking at alternative financing options to offset these costs. Private-label credit cards and Buy Now, Pay Later (BNPL) programs are becoming more attractive. These tools allow you to offer the convenience customers want while potentially gaining more control over the financing relationship. Instead of just paying a fee to a bank, you can use these programs to drive loyalty and larger basket sizes. If you haven't reviewed your payment mix lately, now is the time to see if branded financing can help mitigate the sting of traditional swipe fees.

Source: Payments Dive

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