From Payment Fees To The True Economics Of Accepting A Sale

How a global luxury brand built a consolidated view of what accepting a sale really costs, and used it to judge which payment investments were worth making.

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From Payment Fees To The True Economics Of Accepting A Sale

About

The Lowest Payment Fee Is Not The Lowest Cost.

A global luxury brand managing payment costs across multiple providers, markets and sales channels could see plenty of individual costs — provider fees, fraud losses, operational expense — but had no consolidated view of the total economics of accepting a sale.

Those costs sat across providers, markets, channels and internal teams. At the same time, proposed investments in new payment methods and solutions needed business cases that went beyond implementation cost and headline transaction fees.

The question the business needed answered: what are payments really costing the organisation, and which changes would create genuine financial value?

The work covered

COST

Payment Cost & P&L Review

Payments assessed as a business P&L rather than as a collection of provider invoices and transaction fees.

COMMERCIAL

Diagnostics & Optimisation

Provider setup, contracts and payment mix examined together, so cost and performance could be read as one picture.

STRATEGY

Payments Strategy

Business cases for selected initiatives, compared on total financial value rather than implementation cost.

MEASUREMENT

Cost & Performance KPIs

Financial KPIs and reporting requirements defined to track payment value and cost after implementation.

"Having an end-to-end view of our payment costs helped us identify opportunities to renegotiate commercial terms and, more importantly, understand which process improvements could deliver greater value."

Finance Director

Our Approach

Payments were assessed as a business P&L rather than as a set of invoices. That meant pulling direct costs, risk costs, operational effort and lost revenue into one view before judging any individual decision.

Phase 1

Build The Full Cost Picture

Direct costs assembled across providers, markets and channels, alongside the commercial terms behind them.

Provider setup and commercial considerations
Direct payment-processing costs by market and channel
Operational processes, including reconciliation effort

Phase 2

Add The Indirect Economics

The costs that never appear on a provider invoice but land on the P&L all the same.

Fraud losses and chargeback-related impacts
The potential cost of declining legitimate transactions
Cost and performance measurement gaps

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Phase 3

Test The Investments

Proposed initiatives evaluated on total business value, with the measures needed to track that value afterwards.

Business cases for selected payment initiatives
Initiatives compared on a consistent commercial basis
Financial KPIs required to monitor value after implementation

Result

Transaction Fees Were Only One Part Of The Economics.

The review showed how much sat outside the fee line: revenue potentially lost through unsuccessful legitimate transactions, fraud losses plus the cost of managing fraud, operational effort created by fragmented processes, and commercial assumptions behind proposed initiatives that had not been validated.

The principal finding was that payment decisions could not be evaluated accurately through headline fees alone. Acceptance, fraud, operational effort and customer experience all shape the financial outcome, and there were limited baselines against which future savings or improvements could be measured.

A cheaper setup can cost more overall if it produces lower acceptance, greater fraud exposure, additional operational work or a poorer client experience. The engagement left the business with a framework for weighing that trade-off, business cases for the decisions in front of it, and KPIs to prove the outcome.