A medium-sized transportation services company was seeing the cost of credit card acceptance fees crush their already low margins. They didn’t want to stop accepting credit cards, as this would remove a popular customer payment choice. Instead, they turned to a solution that was already a widespread practice in their industry – surcharging. It was essential for the company to maintain their existing proprietary customer portal backed by sophisticated technology. InterPayments was the only provider that offered an end-to-end surcharging solution that let them keep all their technology and providers in place. Using InterPayments’ PayLink virtual terminal, the company achieved an annual savings of $195,000, leading to a significant increase in margins.
Results
Following a one-time integration with InterPayments, the company started delivering meaningful daily savings. In 2023, the company saved 81% in credit card fee costs. The savings for the company almost certainly exceeded this number, as the segment of customers being surcharged always had the option to move to a lower-cost payment option like debit or ACH. Many of their customers appreciated having the choice and went with a lower-cost option – allowing the company to avoid even more credit card fees. The combined savings was a major win for the company’s profitability given their transaction-heavy, low-margin business.
About the Company
Industry: Transportation and Moving Logistics
Company Size: SMB (200+ employees, $50M+ annual revenue)
Location: Headquartered in the United States, with sales across North America
Background: A major provider of transportation equipment management and leading services
Challenges
Increase margins – Transportation companies often rely on low margins across a high number of transactions. This kind of business is put at particularly high risk for credit card fees, which can exceed 3% and grow every year. As credit card usage and costs grew, the company feared a possible recession would make their position too precarious. They saw that similar companies had solved this concern by surcharging and sought to do the same.
No technology disruption – This company, like most, wasn’t suitable for a one-size-fits-all surcharging solution offered by many payment companies. With a powerful customer portal built on sophisticated backend technology powered in part by Stripe and connecting to NetSuite, they couldn’t change providers or rip and replace this technology without risking what they considered to be a distinct competitive advantage.
End-to-end implementation – Part of the reason the company’s technology was so powerful was that it covered the complete life cycle of every transaction, from point of sale to the general ledger. Their surcharging solution had to be similarly complete, meaning it had to be integrated at several points throughout their system.
The Solution
Among the surcharging solutions available, only InterPayments offered both the ability to integrate directly into the company’s technology and meet their cost-cutting needs. To execute the solution, InterPayments used a combination of their out-of-the-box PayLink interface technology and customized API to meet the company’s needs at multiple points in the transaction life cycle.
To implement surcharging, InterPayments replaced some interfaces provided by Stripe with PayLink, adding surcharging while maintaining Stripe as the payment provider. At other points, API calls were built to ensure the surcharging data was passed successfully between Stripe, NetSuite, and the company’s proprietary technology. This ensured the surcharge was successfully calculated, charged, and passed to the general ledger for auditable recording.
InterPayments was able to do all of this while also offering contractually guaranteed compliance by automating adherence to all U.S. states, Canadian provinces, federal and card network regulations with indemnification to fully mitigate risk.
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