How to run a card acquiring tender

Many businesses that process millions a year on card have never put their acquiring out to tender. The contract was signed years ago, the business has grown, and nobody has had the time to test the market. A well-run tender is one of the quickest ways a finance team can take cost out without touching the customer.

1. Get your data together

Acquirers price on detail. The more accurate your data, the sharper their offers. Before you speak to anyone, pull together:

• Three to twelve months of processing statements, ideally for every merchant account you hold
• Annual card turnover, split by channel: online, in-store, phone and in-app
• Card mix: consumer debit, consumer credit, business and corporate cards, and the share of overseas cards
• Average transaction value and number of transactions
• Chargeback and refund rates
• Your current contract, especially the notice period and any early exit terms

2. Decide what matters beyond price

Price matters, but it is rarely the only thing. Agree internally what else you need before offers come in, so you are not swayed by a low headline rate. Common priorities are settlement speed, reserves, gateway compatibility, multi-currency settlement, approval rates in key markets, reporting, and having a named contact.

3. Ask for pricing you can compare

Ask every acquirer to price on the same basis, ideally interchange-plus-plus, so you can compare their margins directly. Ask them to list every other fee: authorisation fees, gateway fees, chargeback fees, monthly minimums, PCI fees and terminal costs. A low margin with a long list of extra fees can cost more than a slightly higher margin with nothing else.

4. Model the offers on your real numbers

Run each offer against your actual last few months of transactions. That turns a page of rates into one number per acquirer: what it would have cost you. It also shows how sensitive each offer is to changes in your card mix.

5. Read the contract, not just the rate card

• How long is the term, and what is the notice period?
• Can the acquirer change prices during the term, and with how much notice?
• When and how can they hold back funds or ask for a reserve?
• Are scheme fee increases passed through at cost?

6. Plan the switch

A switch does not have to be a big bang. Many businesses move one channel or one country first, or run the new acquirer alongside the old one before moving everything across. Avoid switching in your busiest trading period.

Doing it yourself, or with help

A finance team can run a tender in-house, but it takes time and it helps to know which acquirers actually want your type of business. An independent adviser who works across many acquirers can shorten the process and usually knows where the room for negotiation is.