When searching for a Payment Service Provider in the iGaming industry, it’s essential to consider several basic principles to ensure you find a provider that meets your specific needs and requirements. Here are some key principles to consider:Negotiating card processing fees with your Payment Service Provider (PSP) can be critical in reducing costs and improving your bottom line. Here are eight strategies to help you negotiate more effectively:
Research and Benchmarking
Conduct thorough research to understand current market rates and industry standards for card processing fees. Use this information as leverage during negotiations to ensure you’re getting a competitive rate.
Volume Commitments
Offer to commit to a certain volume of transactions over a specified period in exchange for lower processing fees. PSPs are often willing to negotiate lower rates for merchants with high transaction volumes.
Long-Term Contracts
Consider negotiating a long-term contract with your PSP in exchange for discounted processing rates. PSPs may offer lower rates for merchants willing to commit to a multi-year contract, providing stability for both parties. Review your fee structure with your PSP to identify any unnecessary or inflated fees. Discuss options for eliminating or reducing these fees to lower your overall processing costs.
Bundled Services
Inquire about bundled service packages that combine payment processing with other value-added services, such as fraud protection, chargeback management, or reporting tools. Bundled packages may offer cost savings compared to purchasing services individually. Solicit quotes from multiple PSPs and use competitive bidding to your advantage. By presenting quotes from other providers, you can encourage your current PSP to match or beat their competitors’ rates to retain your business.
Negotiate Interchange Fees
Interchange fees, charged by card networks like Visa and Mastercard, are a significant component of card processing costs. While interchange fees are non-negotiable, you can explore strategies to optimize your interchange rates, such as implementing best practices for card acceptance and transaction processing. Propose a performance-based pricing model where your processing fees are tied to specific performance metrics, such as transaction volume, revenue growth, or customer acquisition. This incentivizes your PSP to support your business objectives and rewards them for helping you achieve success.
Conclusion
Remember to approach negotiations with Payment Service Provider in the iGaming, do it with collaborative mindset, focusing on building a mutually beneficial relationship with your PSP. Be prepared to compromise and explore creative solutions to find a pricing structure that works for both parties. Additionally, leverage your payment processing volume, industry expertise, and market knowledge to strengthen your negotiating position and secure favorable terms.
