The biggest fee increases we saw in 2023 came not from card brands, but from tech enabled, integrated payment processing and subscription-model services with exclusive processor relationships.

What are Software Integrated Payment Processing Services?

Software integrated payment processing services (often referred to as “integrated payment systems”) are products that allow businesses to handle credit card or digital financial transactions within their currently used software applications. The integrated payment system will ideally offer a solution to handle multiple payment methods, offer customization and automation, provide useful reporting, and ultimately, drive efficiencies. 

Integrated Systems & Business Impact

Costs are going up across the board and unfortunately for businesses with integrated systems, this is particularly true. Integrated systems often lock merchants into a specific processor. 

Imagine wearing handcuffs with no key in sight as they squeeze tighter and tighter—this is the situation many businesses are in. As such, many businesses are canceling their system subscriptions. At the same time, increased pressure on software companies is pushing them to offer more than one processor in their integration systems—allowing for more competition and ultimately lower costs.

In a major change from previous policy, Stripe just announced earlier this month they would make their online checkout site, billing services, and fraud protection available to companies that are using rival payments providers.

 

What it Means in 2024?

As we approach the midpoint of Q2 2024, now is a great time for business owners to take a closer look at recurring expenses and consider if the Return on Investment (ROI) of an integration justifies the expense or if any recent policy changes may have created new opportunities. 

Alternative Solutions

There are a variety of other solutions that may get the job done at a lower cost, including payment bridges, semi-integration, and small procedural changes. It may also be possible to negotiate and optimize costs independently or engage the expertise of a third-party auditor like Merchant Advocate.