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Part 4 of 7 · Card fee auditor series ~5 min read

Why some transactions cost four times more

A monthly average hides the fact that your card fees are not evenly distributed. Some transactions cost four times what others do, for four reasons, and two of the four are fixable this week.

Key takeaways

  • Corporate and commercial cards cost multiples of consumer debit. Nothing fixes that.
  • Overseas-issued cards carry higher interchange. Nothing fixes that either.
  • Keyed-in and card-not-present sales cost more. That one is often fixable.
  • Missing data downgrades are a terminal configuration problem, not a pricing one.
  • Rank causes by total cost, not by count.

Four causes, two of them yours

Four downgrade causes converging on a higher-than-expected chargeFour routes on the left converge on one target on the right. Corporate card, higher interchange, not fixable. Overseas issued, higher interchange, not fixable. Keyed in, cardholder not present, fixable. And Data missing, a terminal configuration issue, fixable. All four arrive at Charged above the expected rate. A note says the first two are your customers and not a problem to solve, while the second two are your process and are where the recoverable money is.Corporate cardhigher interchange,not fixableOverseas issuedhigher interchange,not fixableKeyed incardholder notpresent -- fixableData missingterminal config-- fixableCharged above theexpected rateThe first two are your customers and are not a problem to solve. The second two are your process, and they are where the recoverable money is.
Fig 1. Every downgraded transaction has one of four causes. Sorting them this way turns a fee problem into an operations problem, which is a much easier thing to act on.
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  • Front-end & mobile

The join that makes this visible

None of this can be seen on the statement, which reports fees in aggregate by type. It becomes visible only when the fees are joined to the transaction export, because the export carries the two fields that explain almost everything: the card type and the entry mode.

Joined, the answer is usually blunt. Eleven percent of transactions taken over the phone carrying twenty-six percent of the fees is a real result from a real business, and the response to it is not a call to the acquirer. It is a payment link sent by text instead of reading a card number aloud.

Rank by cost, not by count

There will usually be more corporate-card downgrades than keyed-in ones, and they will matter less, because a corporate card on a nine pound sale costs pennies more while a keyed-in transaction on a four hundred pound sale costs several pounds more.

So the report ranks causes by the total extra paid, and the count sits beside it as context. That ordering is the difference between a list that gets acted on and a list that gets filed.

What a fix looks like

A downgrade cost being ranked, addressed and remeasuredA chain beginning with 116 downgrades costing seventy-one pounds extra in one month. It passes through Ranked by cost, keyed-in first rather than corporate. Then One process change, a payment link instead of a phone call. Then Measured next month with the same report and the same arithmetic, which has a branch marked Or it did not work, which is also an answer. And finally forty-four pounds of the seventy-one gone, with the rest being customer mix. A note says the point of measuring monthly with identical arithmetic is that a change either shows up or it does not, and both outcomes are useful.AWS ACCOUNT116 downgrades£71 extra,one monthRanked by costkeyed-in first,not corporateOne process changepayment linkinstead of phoneMeasured next monthsame report,same arithmeticOr it did not workwhich is alsoan answer£44 of £71 gonethe rest is yourcustomer mixThe point of measuring monthly with identical arithmetic is that a change either shows up or it does not, and both outcomes are useful.
Fig 2. The loop is deliberately dull: rank, change one thing, measure the same way next month. Most of the remaining cost after that is customer mix, and knowing that is when you stop.
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