5 ways you could be overspending on payments

As a merchant, rising operational costs and a challenging economic environment mean you need to pay closer attention to where overspending may be occurring, especially when it comes to payments. 

While winning new business is important, reviewing your existing processes is just as critical. Small inefficiencies in how you accept and manage payments can quickly accumulate, impacting your margins over time. 

In this article, we explore five ways in which you could be spending too much on payments, and practical steps you can take to better manage those costs.  

1. Hidden fees and costs

Depending on your business set up, hidden or easily overlooked charges can quietly increase your payment costs. 

Examples may include PCI compliance fees (even if you are already compliant) or depending on your provider and pricing plan, fees for not meeting minimum transaction thresholds – both of which can quietly increase your payment costs. 

Batch fees, charged for settling transactions, are another cost that can add up over time, particularly if you process multiple batches per day. Depending on your provider and pricing plan, these fees may be structured differently, and in some cases, adjusting how often you settle transactions may help manage their impact. 

Regularly reviewing your merchant statements can help you better understand your payment costs and where you may be spending more than expected.

2. A lack of integration

Poor integration and a lack of automation could also lead to excess costs. 

For example, if there is a disconnect between your point of sale (POS) system or accounting software, and your payment terminals, this may lead to operational issues and result in higher costs to rectify any errors that may occur. This is especially the case when having to carry out manual reconciliation which can be costly and time consuming.  

Improving how your payment systems connect with your broader business platforms may help streamline workflows, reduce manual processes, and improve accuracy. 

3. Chargebacks

Chargebacks can also contribute to payment-related costs. 

Beyond the immediate loss of revenue from a disputed transaction, you may also incur chargeback fees, lose merchandise, and spend valuable time responding to disputes. 

In some cases, a higher volume of chargebacks may also lead to additional monitoring or requirements from your payment provider or card schemes. Card networks such as Mastercard monitor merchant chargeback rates against defined thresholds ^*, and exceeding these may result in program enrolment or financial penalties. 

While chargebacks may not be a day-to-day operational cost for all businesses, reviewing how they are managed and taking steps to reduce their occurrence where possible may help limit their overall impact. 

Explore Tyro’s Chargebacks and Disputes Guide. 

4. A lack of fraud prevention

Especially in the current age of artificial intelligence and cyber attacks, fraud prevention measures play an important role in managing payment-related risks. 

Without appropriate fraud detection systems in place, you could face higher levels of fraudulent transactions, which may often lead to chargebacks and fees associated with processing these disputes. 

“Friendly fraud” is another growing issue. This is where a customer can claim that a purchase (or charge) was unauthorised. In some cases, this is deliberate, but often it can be a case where the customer forgot they made a purchase, or they didn’t recognise the name of the billing descriptor.  

According to the LexisNexis Risk Solutions Cybercrime Report in 2025, friendly fraud increased from 15% in 2023 to 36% in 2024, with the figure increasing year on year. 

Having fraud detection tools that accurately identify suspicious activity while minimising false positives could help reduce the potential occurrence of chargebacks and protect your revenue. 

5. Debit card routing and network costs

Many transactions automatically route through international card schemes such as Visa or Mastercard.  

This is another area where you may be spending too much on payments, especially as these card networks charge for scheme fees in addition to interchange fees. 

Without reviewing how your transactions are routed, you could be paying higher network fees than necessary for eligible debit transactions. 

How Tyro helps merchants save money on card payments

At Tyro, we support you with integrated payment solutions designed to simplify how you accept and manage payments, streamline processes and reduce overhead costs. 

Our continued investment in technology means you benefit from reliable software, practical features such as Payment Links ^{^} and modern EFTPOS machines, all designed to support efficient, secure and seamless transactions.

Ready to stop overspending on payments?

Rather than a single root cause, it’s often the case that there are multiple ways in which you could be spending too much on your payments. 

Factors such as hidden costs, excessive chargebacks, a lack of integration, and poor fraud management are prime examples that can add additional costs to a business and have a knock on effect on your bottom line and profitability. 

Practical steps to reduce overspending on payments include improving how you manage chargebacks, reducing manual processes such as payment reconciliation, and having appropriate fraud detection measures are in place ^§. 

Interested in exploring how Tyro can help your business streamline payment costs? Get started today.