Guide
Online Payment Cost Optimisation: A Practical Guide
10 min read · Online Payments
For many businesses, online payment processing is a significant and often opaque operating cost. As revenue grows, the absolute cost of payment processing grows with it — but the pricing model rarely becomes more favourable. This guide explores the primary drivers of high payment costs and the key strategies for optimisation.
The Primary Drivers of High Online Payment Costs
Blended-Rate Pricing
The most common cause of high payment costs at scale. Platforms like Stripe or similar gateways charge a single, fixed percentage on every transaction, regardless of the actual underlying interchange cost. This model is simple but can become less cost-efficient as volumes grow.
Poor Authorisation Rates
Every declined transaction is lost revenue. Suboptimal routing, inadequate retry logic, and a lack of 3DS optimisation can significantly reduce your approval rate, costing you real money.
High Chargeback Rates
Chargebacks are expensive — not just the value of the disputed transaction, but also the associated fees and the operational cost of managing disputes. Inadequate fraud prevention is a major driver.
Unnecessary Gateway Fees
Many businesses pay for gateway features they don't use, or use multiple gateways when a single, well-configured solution would be more efficient and cost-effective.
Key Optimisation Strategies
The most impactful optimisation strategy for most businesses is moving from a blended-rate model to a transparent Interchange++ structure. This alone can reduce effective processing costs significantly for businesses with a favourable card mix.
Beyond pricing model, intelligent transaction routing can improve authorisation rates by directing transactions through the acquiring path most likely to result in a successful approval. This is particularly valuable for businesses with a high proportion of international transactions.
Advanced fraud prevention tools, including machine learning-based risk scoring and 3DS2 optimisation, can reduce chargebacks while minimising friction for legitimate customers — a critical balance for high-volume eCommerce businesses.
Want a detailed analysis of your current online payment costs?
Request a Cost ReviewReduce your online payment costs.
We'll provide a detailed, no-obligation analysis of your current costs and a clear roadmap to optimisation.