Real Savings from Switching Processors: What Businesses Actually Experience

When we present savings proposals to prospective clients, a common reaction is skepticism. The projected numbers look too good to be true. So we compiled the actual results from businesses that have made the switch to provide a realistic picture of what switching processors delivers.

Typical Savings by Business Size

Businesses processing $20,000 to $50,000 per month typically save $150 to $500 per month after switching, representing a 15-25% reduction in total processing costs. Businesses processing $50,000 to $200,000 per month see savings of $400 to $1,500 per month. Higher-volume businesses processing over $200,000 per month often save $1,000 to $5,000 or more per month.

Where the Savings Come From

Savings come from multiple sources, not just a lower rate. The most common areas include lower processor markup over interchange, elimination of junk fees like regulatory product fees and technology fees, PCI compliance fee reduction or elimination, right-sizing the pricing model for transaction patterns, and qualifying more transactions at lower interchange categories through proper data passing.

Restaurant Example

A casual dining restaurant processing $85,000 per month was paying an effective rate of 3.45% on a tiered pricing model. After switching to an interchange-plus model with a competitive processor, their effective rate dropped to 2.78%. Monthly savings: $569.50. Annual savings: $6,834. The transition took 10 days and involved replacing two terminals at no cost.

Retail Store Example

A specialty retail store processing $42,000 per month was on a flat-rate pricing model at 2.9% plus $0.30 per transaction. Moving to interchange-plus pricing reduced their effective rate to 2.45%. Monthly savings: $189. Annual savings: $2,268. The switch required one new terminal and was completed in seven days.

B2B Services Example

A professional services firm processing $120,000 per month in B2B transactions was not qualifying for Level 2 and Level 3 interchange rates. After switching to a processor that automatically passes the required data, their effective rate dropped from 3.2% to 2.55%. Monthly savings: $780. Annual savings: $9,360. The additional data passing happened automatically with no change to their billing workflow.

The Payback Period

The effort required to switch a processor is typically four to eight hours of the business owner's time spread over two weeks. If a business saves $300 per month, the payback period for those hours of effort is achieved in the first month. Every subsequent month represents pure profit improvement.

Find Out Your Savings

Mogil Partners provides detailed savings analyses based on your actual processing statements. Our proposals show exactly where the savings come from and what the transition involves. Contact us with your most recent three months of statements to get started.