Payment processing fees can quietly erode profit margins, especially at scale. Among those fees, acquirer costs often go unnoticed, even though they can represent 20 to 40 percent of the total cost of accepting payments, depending on the region and card type.
For businesses expanding into new markets or managing high volumes of transactions, how payments are routed can have a direct effect on both cost and conversion rates. Yet many merchants still rely on a single PSP or a mix of disconnected integrations. This makes it difficult to adjust routing rules, compare provider fees, or recover revenue from failed transactions.
Many businesses try to manage costs by negotiating better rates or adding new providers, but without the right infrastructure in place, these efforts rarely go far enough. When you’re juggling multiple PSPs, it becomes difficult to see where fees are adding up or which provider is actually performing best. That’s where smarter strategies come in strategies that rely on real-time data and the flexibility to make changes without rebuilding your entire payment setup.
Before you can reduce your costs, it helps to understand where they come from. Acquirer fees are just one part of a broader set of charges that appear in every transaction. When combined, these costs can be significant.
Here’s a breakdown of what usually makes up the total cost of payment acceptance:
Many of these costs vary by geography, currency, and provider. Without full visibility across all your transactions, it’s difficult to know where you’re losing money. That’s why more businesses are moving toward payment orchestration to centralize and analyze their payment stack. It creates a single control layer that brings these hidden costs into the light.
No two transactions are priced the same. While most businesses are aware of base processing rates, fewer understand the variables that push fees higher or lower across markets and providers. The difference can be small on a single transaction but enormous when scaled across thousands or millions.
Here are the primary factors that influence acquirer fees and why they are significant.
1. Card type and brand
Not all cards are created equal. Credit cards often carry higher interchange and scheme fees than debit cards. Premium cards like business or rewards programs cost more for merchants to accept. Even within Visa or Mastercard networks, pricing varies depending on the card’s classification.
Accepting more debit-based or local card schemes where available can significantly reduce costs. The challenge is knowing when and how to prioritize those options, especially across markets. This is where orchestration helps by automatically routing payments based on card type and cost structure.
2. Region and domestic routing
Payments processed domestically are usually cheaper than those routed through international channels. Local acquiring not only reduces FX and cross-border fees, but can also improve approval rates since the transaction aligns with regional banking norms.
For example, a payment coming from a customer in France might be cheaper and more successful when routed to a French acquirer rather than a global one. Platforms that rely on a single PSP can’t make this distinction, but orchestration platforms like Gr4vy allow merchants to route payments based on location, card origin, and cost factors.
3. Currency and foreign exchange
Cross-border ecommerce often involves currency conversion. If you’re not careful about how and where FX takes place, you could be paying hidden fees on every transaction. Some acquirers automatically convert currencies at higher-than-market rates, which eat into margins.
Offering customers the option to pay in their local currency while managing settlement in your preferred currency is one way to control FX exposure. Orchestration can help automate this by pairing the right acquirer and currency combination, depending on geography and business rules.
4. Payment method used
Each payment method comes with its own fee structure. Card networks, digital wallets, bank transfers, and local APMs (alternative payment methods) all charge differently. Wallets like Apple Pay or Google Pay often rely on tokenized transactions, which can benefit from lower risk-based pricing, while local bank transfers may have flat, predictable fees.
A common mistake is relying too heavily on card payments in regions where local methods are cheaper and preferred. Payment orchestration enables merchants to dynamically offer and prioritize the most cost-effective methods in each region without maintaining multiple individual integrations.
5. Transaction volume and tiered pricing
Acquirers often offer volume-based pricing, where rates improve once you cross a certain monthly transaction threshold. But this only works if volume is properly distributed. Spreading your payments across too many PSPs without strategic routing can dilute your leverage and increase fees.
With orchestration, you can consolidate volume intelligently, routing higher volumes through lower-cost providers to hit better pricing tiers, while keeping flexibility with secondary PSPs for redundancy and optimization.
6. Fraud risk and compliance profile
Merchants with higher dispute rates or weak compliance setups may face higher acquirer markups. Some PSPs charge more to offset perceived fraud risks. Others penalize for things like missing 3DS flows or poor chargeback management.
Using orchestration, merchants can enforce stronger risk logic, enable step-up authentication when needed, and route risky transactions to providers with stronger fraud mitigation tools. This reduces fee penalties and protects against future pricing increases tied to fraud profiles.
Before we get into orchestration-driven strategies, let’s review some of the basic fee-reduction methods many merchants already use. These tactics often provide solid initial improvements, especially for businesses that have recently scaled past their first provider.
While valuable, most of these strategies require manual effort, workarounds, or limited visibility into long-term performance.
1. Multi-PSP setup
Working with more than one payment service provider can open up better rates and reduce reliance on a single acquirer. It also improves redundancy and gives merchants more flexibility in how they route transactions.
However, most businesses stop at the connection phase. They integrate a second or third PSP but rarely implement dynamic logic to switch based on geography, card type, or cost. Without orchestration, these setups often go underutilized.
2. Support for local payment methods
Offering region-specific methods like iDEAL in the Netherlands or Pix in Brazil can reduce reliance on costly international cards. Local methods also tend to have more predictable fee structures and higher approval rates.
The downside is integration. Each new method often means a separate technical build, testing phase, and long-term maintenance. This slows down expansion and limits agility.
3. Use of local acquirers
Routing transactions to domestic acquirers can lower scheme and FX fees. It can also boost approval rates since banks are more likely to trust local transactions.
To fully benefit, merchants need to know which acquirer to use per market and have a system to route payments intelligently. Without orchestration, most businesses rely on static routing or business rules that are hard to update.
4. Fraud and chargeback prevention
Many acquirers adjust pricing based on merchant risk profiles. Merchants with fewer chargebacks and better fraud management tend to see lower markups and fewer penalties.
Tools like 3D Secure, AVS checks, and machine learning fraud engines can help reduce exposure. But they need to be applied consistently across all transactions and providers, something orchestration platforms can manage at scale.
5. Delayed capture and smart refund flows
By capturing funds only when inventory is confirmed or the service is delivered, merchants can avoid unnecessary interchange or reduce refund-related costs. Some acquirers also allow partial captures or flexible refund windows, which can be used strategically.
These practices can improve efficiency, but without centralized control, merchants struggle to manage them across multiple systems.
6. Manual data reviews
Teams often rely on spreadsheets or siloed dashboards to compare performance and fees. While this can uncover insights, it is rarely sustainable. Manual reviews are time-consuming and often miss trends in real-time behavior.
A modern payment orchestration platform gives merchants a unified view across all providers, making it easier to understand fee drivers and optimize accordingly. For a full breakdown of what orchestration can unlock, check out this guide on the top 10 benefits of using payment orchestration.
Basic fee reduction strategies can help, but they rely on manual work and limited control. Payment orchestration builds on those foundations by introducing automation, flexibility, and visibility into every transaction.
Let’s explore how orchestration delivers a much deeper level of optimization for acquirer fees and overall payment performance.
1. Dynamic, automated routing
One of the biggest benefits of orchestration is the ability to route each transaction based on real-time conditions. This could include geography, card type, currency, issuer response, or even cost thresholds.
Instead of applying static rules or relying on a default provider, orchestration lets you build logic that adapts to your business needs. This routing engine can be updated without code and supports experiments across providers, so you can learn what works best in each market.
2. Add global payment methods without reworking your stack
Expanding into a new region typically means integrating new local payment methods. This process is often time-consuming and technically heavy. With orchestration, you can add payment methods from across the world using a single integration.
Gr4vy’s platform supports over 400 payment methods, giving merchants the flexibility to offer what customers prefer without spending months building and testing each one.
3. Automated fallback and retry flows
Failed transactions don’t just hurt conversion rates. They also increase your effective fee cost because you pay for gateway services, fraud tools, and other infrastructure without earning revenue from the transaction.
Orchestration can detect soft declines or timeouts and automatically retry the payment with a different provider. This reduces failures, boosts approval rates, and ensures that each transaction has the best chance of succeeding without increasing cost.
4. Reduce foreign exchange exposure with local routing
Cross-border fees and currency conversions can quickly inflate your costs. Orchestration allows you to route transactions through local acquirers whenever possible, avoiding unnecessary FX charges and reducing decline risk from unfamiliar payment flows.
This setup also improves customer trust, since customers are more likely to approve transactions that feel local.
5. Hit volume discounts with smart routing
Many PSPs and acquirers offer discounted pricing based on monthly volume. If your traffic is spread thinly across providers without strategy, you might be missing out on those lower tiers.
Orchestration helps consolidate volume intelligently. For example, you can direct more transactions through a primary provider until you meet a volume threshold, then reroute overflow to backup acquirers for load balancing or region-specific needs.
6. Fraud logic tailored to each region or provider
Different markets and PSPs have different fraud tolerances. Orchestration lets you apply fraud checks like 3D Secure or velocity filters only where needed, reducing unnecessary friction for trusted users while still protecting your business.
This balance helps you avoid chargebacks, reduce penalties, and meet compliance standards without compromising user experience.
A clear example of acquirer fee optimization in action comes from Baby Bunting, one of Australia’s leading baby product retailers. As the business expanded, so did the complexity of its payment infrastructure. With more customers and growing regional reach, the team needed better control over payment performance and costs.
By implementing Gr4vy’s payment orchestration platform, Baby Bunting was able to route transactions based on provider performance and geography. This allowed them to reduce reliance on underperforming PSPs and prioritize higher-performing ones depending on the transaction type and location.
As a result, the company achieved a noticeable increase in authorization rates. At the same time, they gained visibility into payment data and reduced the number of failed or retried transactions. These improvements translated into lower processing costs, fewer customer complaints, and more predictable revenue.
You can explore the full story in the Baby Bunting case study. It shows how greater control over routing and provider selection can lead to stronger results without changing how your customers pay.
Not every business needs orchestration from day one. But as payment complexity grows, the limitations of a single provider or a static integration model become harder to ignore. If your team is spending more time managing failed transactions, chasing insights across dashboards, or juggling multiple providers without a unified view, it might be time to consider a more scalable approach.
Orchestration becomes especially valuable when:
Gr4vy’s orchestration platform is designed to handle this complexity while giving you control and flexibility through a single layer. Whether you’re looking to reduce fees, improve performance, or simplify expansion, orchestration creates the foundation to scale payments with less friction.
What are acquirer fees in payment processing?
Acquirer fees are the charges that a merchant pays to the acquiring bank or payment service provider for processing card transactions. These fees often include markups on top of interchange, scheme, and gateway fees, and they can vary by provider, region, and payment method.
Why do acquirer fees vary so much between transactions?
Several factors influence acquirer fees, including the card type used, whether the transaction is domestic or cross-border, the payment method selected, and the level of risk or fraud associated with the transaction. Fees also differ by provider and pricing model.
How can payment orchestration help reduce acquirer fees?
Orchestration platforms like Gr4vy give merchants the ability to route payments based on real-time cost and performance data. This allows businesses to prioritize lower-cost acquirers, avoid unnecessary FX fees, retry failed transactions, and access local providers without maintaining multiple integrations.
Can I still use orchestration if I already work with multiple PSPs?
Yes. Orchestration does not replace your existing providers, it makes them work better together. With Gr4vy, you can centralize the logic that determines where each payment goes, manage all connections through one API, and monitor results from a single dashboard.
What kind of cost savings can I expect from acquirer fee optimization?
Results vary, but businesses that use orchestration to manage PSPs, reduce retries, and optimize routing often see cost reductions between 10 and 30 percent. The more complex your setup or the more markets you serve, the greater the potential savings.
Acquirer fees are one of the most overlooked drivers of payment costs. While many businesses try to negotiate rates or work with multiple providers, few have the infrastructure to optimize those decisions in real time. Without visibility, flexibility, and control, it becomes harder to scale efficiently or protect your margins as your payment volume grows.
Payment orchestration changes that. It gives you the tools to route payments based on logic, cost, and performance without rebuilding your stack every time you expand or adjust. Whether you want to reduce fees, improve success rates, or support global growth, orchestration helps you take full control of your payments.
Contact Gr4vy to see how orchestration can help your business reduce processing costs and improve your entire checkout experience.
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