How customer uptake changes your payment savings

When you compare payment methods, put a realistic share of your sales beside each quoted fee. A lower rate applies to the payments that move across. Your remaining sales still carry their existing costs, and any fixed charges need to be included in the calculation.

Start by separating how you get paid: at the counter, online or through invoices. Then look at the value of payments in each group. Ten customers paying large invoices can represent more money than a hundred small purchases, so a percentage of customers is a different measure from a percentage of sales value. For a percentage-based fee comparison, use the share of payment value.

Here is an illustrative example, using assumed prices rather than any provider’s tariff. A business takes £10,000 a month and pays 1% in transaction fees. An alternative method charges 0.5%. If 20% of the monthly payment value moves across, £2,000 attracts the lower rate. The transaction-fee saving is £10 a month. At 50% uptake by value, it rises to £25.

Now add the costs of making the change. Suppose the alternative also costs £5 a month and requires £120 of setup spending. At 20% uptake, the net monthly saving is £5, so recovering that setup cost takes 24 months. At 50%, the net saving is £20 and the same outlay takes six months. These examples assume steady sales and uptake, unchanged costs on the remaining payments and no other charges. Include any applicable VAT, staff time and other costs in your own figures.

Use the charges you can actually avoid. If your existing terminal rental or monthly subscription continues, keep it in the comparison. Where a tariff includes a charge per transaction, count the payments as well as their total value. For Pay by Bank or any other method you are considering, use the complete quote and your own payment mix.

Test the customer journey before relying on an uptake forecast. Try a first payment and a repeat payment. Check how clearly the choice is presented, what happens if a customer needs help and how staff confirm that payment is complete. Keep the other ways to pay easy to find. During a trial, record the share of completed payment value using the new method and any support time it creates.

Wonderful’s May guide explains how transaction values, margins and customer habits affect the scope for savings. Turn that into a decision for your business: calculate a cautious case and a stronger case, set the saving that would justify a trial, and compare the result with your next bill.