Your PSP invoice is not a fixed cost
Most merchants treat their PSP costs like a utility bill. It arrives monthly, gets paid, and nobody looks closely at what is inside. That is exactly what payment service providers count on.
Your PSP invoice contains multiple cost components with very different levels of negotiability. Some are fixed by regulation. Some are set periodically by international card schemes and passed through. And some are entirely at the discretion of your PSP, directly reflecting how hard the contract was negotiated when it was signed.
Merchants who have never had their rates independently reviewed are almost certainly paying more than they need to. Not because their PSP is bad, but because no PSP has an incentive to raise that question itself. That applies to a Dutch webshop with EUR 10 million in revenue just as much as to an international retailer or brand selling in twenty-five countries.
The three components of card transactions
Every card transaction you process carries three separate cost components, regardless of which PSP you use.
The first is interchange. This is the fee paid to the cardholder’s issuing bank. For most consumer debit and credit card transactions within Europe, interchange is capped by the EU Interchange Fee Regulation. Consumer debit is capped at 0.2% of the transaction value, consumer credit at 0.3%. What most merchants do not realise is that interchange is not just a rate but also an optimisation parameter. The composition of your card mix, the proportion of 3DS authentications, and the way transactions are classified all influence the effective interchange rate you pay. A higher proportion of commercial cards, premium cards, or cards issued outside the EU drives costs up. Interchange optimisation, actively steering towards a more favourable card mix and transaction classification, is a part of payment cost management that most merchants leave entirely untouched.
The second is scheme fees. These are charged by Visa and Mastercard for using their networks. Scheme fees have risen significantly in recent years and now represent a serious share of total PSP costs. They change periodically and are passed through to merchants by most PSPs, sometimes at cost, sometimes with a markup. As with interchange, there is more room than merchants think. The way transactions are presented to the schemes, the mix of transaction types, and the contractual arrangements around pass-through together determine what you effectively pay. If your contract does not provide clarity on this, you may be paying more than the actual rate without knowing it.
The third is the acquirer markup. This is what your PSP charges for its own services: processing, settlement, reporting, risk management, and the relationship itself. This is the only component that is fully negotiable. It typically ranges from 0.10% to 0.50% per transaction depending on your volume, business model, and how effectively the contract was negotiated at the time. Most merchants have never actively pushed on this figure.
Local payment methods: a separate cost profile per market
Card transactions are not even the largest cost item for many merchants. Local payment methods, which are dominant in many European markets, each have their own fee structure. And PSPs exercise considerably more pricing freedom here than with cards.
In the Netherlands, iDEAL is the standard. The flat fee per transaction varies widely between PSPs and can range from a few euro cents to more than 25 cents. For merchants with high iDEAL volumes, this is one of the most impactful cost items, and at the same time one of the least questioned.
In Belgium, Bancontact plays a comparable role. In France, Carte Bancaire is dominant, with its own fee structure that PSPs pass through differently. In Germany, PayPal is dominant, alongside local bank transfer solutions. In Switzerland Twint dominates, in Spain Bizum, in Poland Blik. In the Nordics, Swish, MobilePay, and Vipps dominate depending on the country.
Merchants selling cross-border pay separate rates for each of these methods, set by their PSP. These rates are rarely reviewed proactively, even when volume in a specific market grows significantly. The result is that effective costs per payment method per market can deviate substantially from what is competitive.
Buy now pay later methods such as Klarna and Afterpay have a different cost model, typically a percentage of the transaction value plus a flat fee. A PSP can add its own margin on top of what it pays itself. That is rarely stated explicitly in the contract.
The hidden cost items on your invoice
Beyond transaction costs, a typical PSP invoice contains a number of items that merchants rarely actively manage.
The bundling of debit and credit cards with entirely different cost structures into a single rate line. Debit and credit cards, and even variants within those categories, each have their own interchange and scheme fee profile. PSPs that bundle these card types into a single rate mask structural cost differences that can diverge even further by channel, online versus POS. Without a breakdown by card type and channel, targeted optimisation is impossible.
Monthly gateway and platform fees. Fixed amounts for platform access, reporting tools, or account management. Fully negotiable, especially at higher volumes.
Chargeback and dispute fees. PSPs charge a fee per chargeback, sometimes on top of what the schemes themselves charge. For merchants in sectors with higher chargeback ratios, such as fashion or electronics, this can be a serious cost item.
3DS and authentication fees. Per authentication request, including for transactions that are never completed. With the rollout of SCA under PSD2, these costs have risen significantly for many merchants, without anyone questioning whether the rate is competitive.
FX and currency conversion fees. Relevant for any merchant selling cross-border. Some PSPs apply a fixed spread above the mid-market rate without disclosing this explicitly, causing merchants to structurally overpay on every foreign transaction without realising it.
Refund fees. Some PSPs charge a processing fee per refund. For merchants with high return rates, this adds up quickly.
What your pricing model tells you
The pricing model in your PSP contract determines how much visibility you have into all of these cost components.
Blended pricing gives you a single percentage rate per transaction. Simple to understand, impossible to analyse. Interchange, scheme fees, and acquirer markup are bundled into one rate. You cannot see what you are paying per component, which means you have nothing to benchmark and nothing to negotiate against.
Interchange plus pricing (IC+) separates the acquirer markup from the rest. More transparent and more negotiable, but scheme fees are still bundled in.
Interchange plus plus pricing (IC++) is the most transparent model. Interchange, scheme fees, and acquirer markup are all billed as separate line items. This is the model used by most large European merchants. If you are processing meaningful volume and you are still on a blended rate, that alone is reason enough to start the conversation.
Five signs you are overpaying
You have not renegotiated since you signed your original contract.
PSPs improve their unit economics as they scale. The rate you agreed to when you were a smaller merchant is rarely the best rate available to you today.
Your PSP has never proactively flagged a cost reduction opportunity.
PSPs are not structurally incentivised to reduce your fees. If yours has never done so, that silence tells you something.
You are on blended pricing with no per-transaction breakdown.
Without visibility into the cost components, you cannot identify where the overcharge is, let alone quantify it.
You have never received a scheme fee reconciliation.
Scheme fees change periodically. If your PSP has never sent you a reconciliation of actual rates versus what you were charged, that is telling.
You have no benchmark.
Without knowing what comparable merchants pay for comparable volume and card mix, you have no negotiating leverage and no objective basis to assess whether your current rates are competitive.
What an independent review delivers in practice
An independent review of PSP costs goes beyond comparing transaction rates. A large part of the value lies in what is not on the front page of your invoice.
PSP contracts regularly contain clauses that turn out to be unfavourable on closer inspection: automatic renewals with short notice periods, volume thresholds that trigger rate increases when not met, or pass-through clauses for scheme fees that give the PSP room to charge more than it pays itself. Merchants who have never had these contracts independently reviewed carry a structural risk of costs they do not see coming.
A structured review covers four areas: pricing model analysis, benchmarking of all rates against the current market, contract review of the fine print and renewal terms, and an analysis of local payment method rates per market alongside card transaction costs.
The savings this delivers depend on volume, current rates, and how long those rates have gone unchallenged. For merchants processing several million euros per year, the annual impact is typically significant. That is why the no cure, no pay model works: there is no fee if there is no saving.
The point is not that your PSP is acting in bad faith. It is that your PSP is acting in its own interest, and that is not the same as yours. An adviser who works exclusively for merchants, and never for PSPs, does not have that conflict.
Where to start
The first step is insight. Not into what you are paying, but into why you are paying it and whether it is competitive. That requires an independent perspective, access to current benchmark data, and knowledge of what is standard in PSP contracts and what is not.
EcomStream works with clients including Amac, Bugaboo International, Leen Bakker & Kwantum, Swiss Sense, Versuni/Philips Home Appliances, and vidaXL.
EcomStream reviews PSP cost structures for retailers and brands on a no cure, no pay basis. Every engagement is handled personally by Ramon Helwegen. Use the PSP Upside Calculator for a first indication of the potential saving, or contact us directly at info@ecomstream.nl.
