A provider of software to the automotive industry knew that, due to the nature of the business, they would need to accept a large number of credit card payments. They had many small, family-owned customers, and understood the value that credit cards provide to those customers: fast, easy settlement, the ability to float payments for 30 days, and points rewards that could be used towards personal benefits or additional savings.
The company received benefits from accepting credit cards as well, like fast time to payment and less exposure to bad debt. But the costs of accepting cards across so many transactions were high and ate deeply into margins. The company needed a way to minimize the cost of this payment method without losing these benefits – or any customers.
After a period of intense research and multiple conversations with InterPayments, the company determined that the InterPayments surcharging solution was uniquely equipped to help them solve the challenge it was facing in a seamless way. By integrating directly into the existing Microsoft Dynamics F&O-based payment stack, the company minimized any drastic workflow changes while getting all of the benefits of compliant surcharging. The resulting savings were dramatic – 92% of what it cost to accept cards returned to the company in the form of surcharges and customers changing payment methods.
Surcharge Program Overview
Industry: Automotive Data Service
Size: $10M-$50M
Location: US
Customers: B2B
Payments Software: Microsoft Dynamics F&O
Who to Surcharge: All card not present payments
Time to Implement: under 4 months
Considerations: High cost of acceptance, integration with existing software
About the Company
A leading B2B technology provider serving the automotive ecosystem, this critical SMB delivers trusted data and software for manufacturers, garages, and other businesses critical to putting and keeping vehicles on the road. With a focus on data accuracy and compliance, they work to meet customers where they are, integrating into existing technology to reduce operational friction and keep businesses running.
Solving Challenges
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Challenge |
Solution |
|---|---|
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Lowering the Cost of Credit Card Acceptance – The company greatly appreciated the large number of customers paying with credit cards, but the ever-increasing cost of accepting them presented a challenge that the company sought to overcome. |
InterPayments supported compliant surcharging, so the company could get the benefits of accepting credit cards while giving the customer options: get credit card benefits, or move to a less expensive form of payment. Because InterPayments fully automated compliance with indemnification, the company did not have to worry about any of the frequent regulatory changes impacting their cost-savings approach. |
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Integration with Existing Technology — The company accepted electronic payments through MS Dynamics F&O. Making significant changes to the existing technology stack would be hugely expensive, meaning the company wouldn’t see a return on the investment into surcharging for years. |
Interpayments provided agnostic, independent surcharging technology that can be integrated anywhere. InterPayments offers multiple options to integrate directly into MS Dynamics F&O, so the company was able to select what they needed while leaving the entire technology solution in place. This allowed the surcharging solution to cover its costs in just a few weeks. |
Results
Successes at a Glance
Credit Card Payments: $2.5 million annually
Surcharge Recovery: $50,000 annually
Customer Migration from Credit Card: 20%
Savings from Customer Migration: $15,000
Total Savings: $65,000, or 92% of fees
Customer Attrition: 0%
Together with InterPayments, the company addressed its cost challenge and achieved the significant margin improvement it needed. The company saw a significant fee recovery from surcharges relative to its credit card volume — $50,000, or more than 70% of its costs from the previous year. This combined with savings from credit card-using customers switching to debit cards and ACH to avoid the surcharge. Together, credit card fees were nearly eliminated for the company — a total savings of 92% of the company’s credit card fees.
The company achieved this without any customer dissatisfaction. Because InterPayments treats surcharging as more than just a fee, every surcharging solution is implemented with merchant customers in mind – including frequent messaging and process recommendations to ensure the best possible experience.
The result was a strong foundation for a surcharging program that has now been in place for several years, supporting the company’s ambitions as it continues to grow in both customer satisfaction and revenue.
Interested in seeing how InterPayments can help your company? Contact us today.
To keep the topic of the article anonymous, identifying details have been changed.