Several credit card processors impose unexpected fees and services with minimal notice to merchants. These charges are often embedded in the fine print of contract language or tucked away in lengthy statements. Over time, these incremental adjustments can significantly surpass typical merchant pricing some of which have exceeded 6%.
Furthermore, as businesses become entrenched in POS and software systems with integrated payment functionalities, it breeds anti-competitive behavior. This entrenchment often locks businesses into a dual dependency, making alternatives costly and less attractive, limiting free market choices.
Additionally, the hidden nature of these costs in illegible statements hampers transparent pricing, positioning these providers in a commanding role. This dynamic threatens the integrity of a balanced competitive marketplace.
Ideally, businesses should easily read and understand their fees, delegate credit card fees to customers, promote cost-effective payment options, or steer towards economical choices. However, this is not the reality. Card brands have limited cash discounting, created complex, illegible pricing schemes, and made it near impossible to negotiate pricing with credit card processors without significant knowledge of the industry, profit margins and complicated and ever-changing cost structures (Interchange).
