Why Merchant Services Rate Increases Are Becoming an Annual Trend
Running a business comes with a myriad of costs, but one that often surprises merchants is the annual rate increase in merchant services fees. Recently, businesses that process payments through major providers like TSYS were caught off guard when the company raised its rates without prior warning. For many merchants, these types of increases are becoming a regular occurrence, with providers citing rising costs for transaction processing. Let’s break down what happened with TSYS and explore why these fees seem to go up every year.
TSYS Rate Increase: A Cautionary Tale
In August 2024, TSYS implemented a fee increase that left many of its merchants blindsided. Buried within a message promoting paperless statements, the company announced that it would be raising its settlement funding fee by 0.35%, or introducing the fee for merchants who didn’t already have one. The notice gave merchants 30 days to either accept the fee or terminate their agreement, but many felt the increase was slipped in with little transparency or warning.
This kind of change can be a significant burden, particularly for small businesses already dealing with tight margins. TSYS justified the increase by pointing to rising transaction processing costs, but for merchants, it was yet another unexpected expense that could have been better communicated. The company’s decision to introduce the new fee structure alongside its move toward sustainability through paperless statements added to the frustration for many.
Leveraging Swipesum During a Merchant Services Rate Increase
When merchant services providers implement annual fee increases, businesses can feel like they have little control over their payment processing costs. This is where leveraging a partner like Swipesum can make a significant difference.
Swipesum specializes in helping businesses navigate the complexities of payment processing, ensuring that you’re getting the most competitive rates available. With a team of payment experts, Swipesum audits your current merchant services agreement, identifying areas where you could be saving money or negotiating better terms. Whether you're a small business owner or managing a large enterprise, Swipesum acts as an advocate on your behalf, reviewing your statements, fees, and rate increases like those recently implemented by TSYS.
In cases where providers raise rates without warning, Swipesum can step in to help you explore alternative providers or negotiate with your current one, ensuring that you’re not paying more than you should. By taking the hassle out of managing merchant fees, Swipesum empowers businesses to focus on growth, rather than worrying about hidden costs.
Elavon Payment Process Rate Increase
Elavon is a leading provider of merchant services across North America, known for serving a wide range of industries including healthcare, retail, hospitality, and transportation. Owned by U.S. Bank, Elavon has built a strong reputation for its comprehensive payment processing solutions, offering everything from point-of-sale systems to eCommerce platforms.
Rate Increase News
Elavon, like many payment processors, has faced rising transaction costs due to the growing complexity of payment networks and regulatory compliance. Recently, reports have surfaced about Elavon implementing a small percentage fee increase, affecting merchants across various sectors. The increase is primarily attributed to higher operational costs and necessary investments in security and fraud prevention. While these rate hikes may seem marginal, they can have a significant impact on small and medium-sized businesses that operate on tight margins. Merchants are advised to stay vigilant and review their monthly statements for any unexpected changes.
Worldpay Rate Increase
Worldpay, a subsidiary of FIS, is one of the largest merchant services providers in North America, offering a full suite of payment processing solutions. Worldpay serves a diverse range of industries, from retail and eCommerce to large enterprises. The company is recognized for its global reach and ability to handle high transaction volumes efficiently.
Rate Increase News
Worldpay recently raised its merchant fees, citing inflation and increased transaction costs as key reasons for the adjustment. While the company emphasizes its commitment to providing world-class service, many merchants have expressed concern over the lack of notice regarding the rate hike. This has caused some businesses to reconsider their payment processing options. As with other providers, merchants are encouraged to audit their fees and negotiate with Worldpay for better rates, especially if they are long-standing clients.
First Data (CardConnect and Clover) Rate Increase
First Data, now part of Fiserv, is a powerhouse in the merchant services industry, offering solutions like CardConnect and Clover. Clover has become a popular choice among small businesses for its sleek, all-in-one POS systems, while CardConnect is favored by larger enterprises for its secure payment processing services.
Rate Increase News
In the past year, First Data has quietly increased its merchant fees, particularly through its Clover platform. The increase is primarily attributed to rising costs in maintaining and upgrading its technology infrastructure. Additionally, First Data has had to cope with heightened security regulations, which have further contributed to the need for higher fees. Small businesses relying on Clover have expressed frustration at these increases, especially as margins continue to shrink post-pandemic. Merchants using First Data solutions are advised to keep a close eye on their statements and consider negotiating terms to prevent further cost escalations.
Chase Merchant Services Rate Increase
Chase is one of the most well-known financial institutions in North America, offering a comprehensive merchant services solution under its Chase Merchant Services division. With its integration into JPMorgan Chase’s broader financial network, Chase provides businesses with secure and efficient payment processing solutions, often preferred by large enterprises and retail chains.
Rate Increase News
Chase Merchant Services has recently adjusted its fee structure, citing rising interchange fees and operational costs. While Chase is transparent about its pricing changes, many merchants were still surprised by the timing and extent of the increase. For businesses handling large volumes of transactions, this adjustment has had a notable impact on their overall costs. Chase has emphasized the need for such changes to maintain top-tier service and security, but businesses are encouraged to negotiate rates, especially if they qualify for volume discounts or custom pricing.
TSYS Rate Increase
TSYS, a Global Payments company, is another leading provider of payment processing services in North America. TSYS serves a wide variety of industries, from small businesses to global enterprises, offering reliable solutions for credit card processing, point-of-sale systems, and more.
Rate Increase News
TSYS recently announced a significant rate increase, which has caused concern among its merchants. The increase came with little warning, catching many businesses off guard. As mentioned earlier, the fee hike included a 0.35% increase in settlement funding fees, which either impacted existing fees or introduced new ones for certain merchants. TSYS attributed this change to rising costs in transaction processing and regulatory compliance, but the abruptness of the notice has left many businesses feeling unprepared. Merchants should carefully review their agreements and consider alternative options if these increases significantly impact their bottom line.
Global Payments Rate Increase
Global Payments, another industry giant, serves as a major player in the world of merchant services. As a direct competitor to companies like Elavon and First Data, Global Payments offers a wide range of payment solutions to businesses of all sizes, including payment gateways, mobile payments, and point-of-sale systems.
Rate Increase News
Global Payments has also raised its merchant fees over the past year, citing inflation, rising interchange fees, and higher operational costs. These increases have been felt most acutely by small and medium-sized businesses. Global Payments has made efforts to communicate these changes, but many merchants have expressed frustration over the frequency of these adjustments. As with other providers, Global Payments’ customers are encouraged to reach out to their account managers to explore possible fee reductions or custom pricing to mitigate the impact of these increases.
Merchant Services Rate Increase Top Questions
Why do merchant services fees increase annually, and how can I avoid overpaying?
Merchant services fees tend to increase annually due to rising transaction costs, regulatory compliance, and inflation. To avoid overpaying, it’s crucial to actively review your statements and stay informed about any changes. At Swipesum, we help businesses by regularly auditing merchant statements, identifying unnecessary fees, and negotiating lower rates with processors so you don’t get caught off guard by these increases.
How can Swipesum help my business lower payment processing fees and renegotiate rates?
Swipesum acts as your Chief Payments Officer, dedicated to ensuring your business gets the best rates available. We leverage proprietary software to audit your current statements, identify areas for cost savings, and negotiate directly with your processor. Our team’s expertise in the payments industry allows us to find solutions that save you money and streamline your payment operations without any effort on your end.
What are the major differences between payment processors like TSYS, Elavon, and Worldpay?
Each payment processor has its strengths, but they also have different pricing structures, fees, and services. TSYS, Elavon, and Worldpay all offer comprehensive processing solutions, but their rate increases, service fees, and customer support can vary widely. At Swipesum, we help businesses navigate these differences and ensure that you're working with the provider that offers the best fit for your specific needs, at the lowest cost.
How do I know if I’m being overcharged on my merchant account fees, and what should I look for on my statements?
To identify overcharges, closely examine your statements for unexpected fees or charges that weren't previously there. Look for terms like "rate increases" or "new fees," and compare your effective rate (total fees divided by total processing volume) to industry standards. Swipesum’s team can quickly audit your statements using our proprietary software to pinpoint any unnecessary fees, ensuring you're not paying more than you should.
What are my options if I disagree with a sudden rate increase from my payment processor?
If you're hit with a rate increase, you usually have a short window—often 30 days—to contest the charges or terminate your agreement without penalty. Contact your provider to negotiate, or better yet, let Swipesum handle it. We can review the terms of your contract, renegotiate rates on your behalf, or explore alternative payment processors that offer more favorable terms. Our goal is to protect your bottom line and simplify the process for you.
Annual rate increases in merchant services fees have become the norm, with providers like TSYS, Chase Merchant Services, and Elavon leading the charge. For merchants, the best defense is to stay informed, regularly review statements, and explore alternative options when fees become too burdensome. Leveraging the expertise of Swipesum can provide invaluable support in auditing and negotiating these fees, helping businesses avoid unexpected costs while maintaining efficient payment processing solutions.
