1% Matters
How much is too much?
It’s often a missed question, really. Whipped cream on your pie? Sky’s the limit. Extra vacation days in your new contract? Bring ‘em on. But when it comes to your company’s POS transaction fees, the ugly truth is that you’re probably already paying too much.
But it can’t be that much, right? After all, the vendor basically gave you the hardware, so you’d expect a little extra in the service fees. Here’s the trouble—that “little bit of extra?” It’s a lot. If you’re a retailer doing $100M in business this year, those fees are likely costing you at least a million (or beyond) more than they should be.
It’s a bold claim, so let’s back up and understand how we get here. These days, we’re all celebrating the healthy increase in global retail sales since Covid. It’s a good thing, but the forgotten reality is that in stores, the NPD Group estimates that over 80% of sales are done via credit or debit card, representing $2.89 trillion in purchases. Since you’re paying a fee every time a card is tapped or swiped, we’re talking about a gigantic market—estimated to be as much as $135.75 billion in 2023 alone.
For a retailer, those fees add up quickly. Nobody tells you that the typical POS vendor contract includes a flat percentage of sales—some as high as 3%—plus fees for statements, PCI compliance, transaction fees, chargeback fees, and potentially even a “true-up” provision at the end of the year. This means that when your POS provider offered you free or discounted hardware during the negotiations in order to get you to sign on the dotted line, they were just hiding the true bill you’re now stuck with.
And when that bill comes due, it’s ugly. Beyond the actual hardware and software costs, you’re typically looking at an average processing fee of 2-3% or more based on a 2024 Forbes study, while the Merchant Payments Coalition puts the average fee around 2.94% for Visa and Mastercard specifically. That puts us roughly back where we started—if you’re a retailer doing $100M in business, you’re leaving a million dollars a year—or more—on the table.
Put simply, if you’re paying anywhere near 2.5%, then you’re paying about 1% more than you should. As a modern retailer, conducting business in various channels—oftentimes at a global scale, understanding and being proactive about payment processing fees for your POS and eCommerce is crucial.
At KWI, we approach payments and transactions differently. Over our 40 year history, we’ve established a deep bench of partnerships with payment processing vendors, enabling us to offer our clients clear, stable, and cost-effective pricing for POS and eCommerce transactions. That means clarity in your contract, no surprises in your bill, and true 24/7/365 support to all levels of your team.
Our goal is always to be more than just a vendor—we want to understand your business, see the nuances of your unique market, and work together with you to create a system that allows you to thrive, to innovate, and to delight your customers now and for years to come.