Dateline: Woking, 16th April 2024.Recent figures (from the Nilson Report) shows that US merchants paid a record $161 billion in processing fees to accept $10.6 trillion in card payments. The total value of fees paid was up 17% from 2021, even though purchases for goods and services tied to all card payments grew by only 12% year-over-year. This is because credit cards made up a larger share of spending and credit cards cost merchants more to accept. Credit card spending in fact grew by 19% in 2022, more than three times growth rate for the (less costly) debit cards. Given this trend (banks pushing premium credit cards with generous rewards paid for by the merchants), the management consultants Bain forecast of peak card (in the US market) in 2029, may actually be slightly behind the curve as these costs push merchants to look for alternatives.ShareHow to CompeteWith profit margins being squeezed, merchants have responded by surcharging for card use (payment consultancy TSG reckons between that between five and ten per cent of the eight million card-accepting small businesses in the US now charge fees for credit card usage), by discounting for cash or by encouraging customers to bypass cards completely and switch to alternatives such as payments direct from the customer’s bank account to the merchant’s bank account. With big billers such as Verizon, AT&T and T-Mobile asking customers to shift monthly payments from their credit cards to bank accounts, they are leading a trend that will only grow stronger as instant payments, open banking…Cards and Competitors