Scroll down to see our 2024 report on Non Interchange Pass Through Fees

~

Scroll down to see our 2024 report on Non Interchange Pass Through Fees ~

Compliance as a Service

We help acquirers, ISOs, and PayFacs improve profitability by reducing billing errors, remedying non-compliance, and ensuring the pass through of relevant costs.

The Problem

Wholesale ISO and Payment Facilitator (PayFac) profitability is directly impacted by the ever-evolving card network costs passed by their acquiring bank, which are challenging to understand, capture, and pass through. This results in costs being absorbed instead of being passed through or remediated.

A thorough analysis of the costs and underlying data can help:

  • Correct billing errors

  • Qualify for better interchange

  • Remedy non-compliance issues

  • Pass relevant costs to your clients

The Solution

Robust data analytics can create an ISO/PayFac competitive advantage, maximizing client retention, residuals, and profitability.

CRG’s Compliance as a Service (CaaS) delivers quantifiable results by identifying and helping to implement solutions for your top fee opportunities.

Levers the Impact Profitability

*Hover over an image to see some examples

Timeliness of POS settlement following authorization approval

Conflicting data between auth and clearing (e.g. MCC, $ amount)

Incomplete data (e.g. order number, AVS)

Excessive downgrades

Authorization integrity

Excessive fraud and / or chargebacks

EMV Product non-compliance

Report fees

Optional product fees

Our Approach

 Data Collection

Week 1

Provide us with the last 3 months of payment network digital invoices and merchant invoices

Analysis

Week 2 to 5

We conduct a detailed analysis of your data. If needed, we can access additional data via processor and/or V/MC portals

Recommendations

Week 6

We provide insights, cost-saving estimates, and a detailed action plan to realize the savings opportunities identified

Optional

  • Monthly updating of the analysis to identify trends and new issues

  • Negotiating directly with acquirers and the card networks, and/or conducting RFPs

  • Consulting with sub-ISOs and/or merchants to help them minimize their pass through fees

Reducing fees by over $4M/year for a large US ISO

Case Study

 1. Background

  • A top US ISO was incurring sizable data integrity non-compliance fees for dual message (authorization and clearing) and dual message EMV (authorization and clearing), in addition to experiencing some single message and addendum data program issues.   

  • The ISO lacked experienced and knowledgeable operations, finance and technical staff that could analyze the data, determine root causes, and remedy on a regular basis. 

  • The costs were absorbed and were not being passed on to the responsible parties (wholesale ISOs, retail ISOs, payment facilitators, merchants) 

2. Approach

  • Conducted an invoice review to prioritize top opportunities

  • Analyzed data integrity errors to identify the root causes of the issues, which found

    • Set up issues (onboarding remediation) by sub-ISOs, payment facilitators, and internal operations

    • EMV issues (software/hardware/firmware)

    • Technical issues (internal, gateway, and processor)

  • Analyzed transaction-level details

  • Developed and facilitated the implementation of remediation recommendations to fix and/or pass the costs on to partners/merchants

  • Championed internal and external stakeholder meetings to address set up and technical issues

3. Results

  • Two top priorities, MC Data Integrity Fees and MC Authorization Integrity Fees, were analyzed.   

  • The following potential savings were uncovered:

    •  $62.5k/month from set up issues (incorrect merchant and sub-merchant onboarding)

    • $125k/month related to EMV issues

    • $62.5k/month from technical issues (processor or gateway software limitations)

    • $100 k/month due to authorization integrity

4. Recommendations

The following recommendations were implemented, which resulted in savings figure of $350k / month

  • Correct merchant onboarding 

  • Work with the processor or gateway to remediate software limitations 

  • Pass relevant fees to the merchant and assist them with remediation 

NIPTF Guide

Learn more about how we have been working with our clients to reduce their Non Interchange Pass Through Fees (NIPTFs) and realize cost savings. A full article can be accessed here, which contains the following:

Part 1: An Introduction to NIPTFs

Learn what exactly an NIPTF is, why controlling them can be challenging, the impacts they can have on the profitability of payment facilitators, ISOs, acquirers, and processors, and how they can be better managed.

Part 2: How To Analyze & Minimize NIPTFs

Gain insight on how we have been supporting clients to improve management of NIPTFs and improve their profitability. More specifically, we discuss the typical approach we take during our engagements (which can be used by any organization with the right expertise and knowledge of network rules), as well as some key observations that have arisen as a result of our work.

Practice Leader

Martha Rhine

Director

Martha is an experienced payments executive with a proven track record within the financial services industry. She is skilled in worldwide acquiring & issuing services, interchange and card compliance, PCI data security, professional services (including releases), product management, project management, risk management, and regulatory compliance (AML, privacy).