More card payments should not cost retailers more – yet they do

This week two figures sat side by side that should not fit together. The Boston Consulting Group reports that card payments per capita in Germany grew by 11.3 per cent, faster than the EU average. And in the same study, 79 per cent of the large merchants surveyed say their payment costs have risen over the past five years; fewer than one in ten managed to reduce them. In any other industry, volume growth this strong would push unit costs down. In the card business, it ends up with the provider. My thesis: when the number of card payments multiplies, the price per payment has to fall — anything else is a fee increase nobody ever had to announce. And now is the time to say so, because hundreds of thousands of small businesses are signing contracts running four, five or six years.

What the figures actually show

According to BCG's Global Payments Report 2026, published on 23 September, consumers in Germany made 196 card payments per capita in 2025. The EU average is 327, the Nordic countries stand at 539. Germany is growing at 11.3 per cent, the EU at 7.9 per cent. So we are no longer a laggard but a catch-up market, and the gap to the EU average shows how much growth still lies ahead.

The second half of the report is the uncomfortable one. BCG surveyed nearly 500 merchants with annual revenue between 50 million and 10 billion dollars. 79 per cent report rising payment costs. Only 12 per cent manage payments as a contribution to profit, have a dedicated team for it and route their transactions dynamically across several providers. These are corporations with procurement departments. If even they cannot bring their costs down, how is a hairdresser supposed to?

The girocard half-year figures from EURO Kartensysteme complete the picture for day-to-day in-store trade: 4.0 per cent more transactions but only 0.8 per cent more turnover; the average ticket size fell from 37.28 to 36.12 euros. Customers pay by card more often and in smaller amounts. For every contract with a fixed per-transaction fee this means the same turnover generates more transactions and therefore more cost.

The strongest objection, and why it does not hold

The serious objection goes like this: costs are rising because merchants take more by card, not because the price per payment is rising. A business that used to take 30 per cent by card and now takes 70 per cent naturally pays more in fees. In return it saves on cash logistics, change, till discrepancies and cash-in-transit. On balance, the card may still be the cheaper option.

That is true, and I do not dispute it. But it answers the wrong question. The issue is not whether the card is cheaper than cash. The issue is who gets the economies of scale. A payment network operator (Netzbetreiber) whose transaction volume grows at double-digit rates spreads its data centre, certifications, support and sales over more transactions. Its cost per payment falls. If prices for the merchant stay the same, or even grow along with volume through fixed fees, the entire efficiency gain stays on one side of the counter.

And the components the provider cannot influence have long been capped. Regulation (EU) 2015/751 limits the interchange fee on consumer cards to 0.2 per cent for debit and 0.3 per cent for credit cards. Anything above that is the acquirer's and network operator's margin, and therefore negotiable. If nearly four in five large merchants still see rising costs, that is not a law of nature; it is contracts.

Where growth drains away in small businesses

In the SME segment there are two pricing models that hide this problem in different ways. The first is the fixed per-transaction fee. A worked example with an assumed eight cents: on a 36-euro ticket that is about 0.2 per cent; on a four-euro coffee it is already two per cent. The smaller and more frequent payments become — and that is exactly what the girocard data show — the more expensive this model gets, without a single line of the contract changing.

The second is the flat percentage rate that providers such as Flatpay use to grow through field sales. This week Adyen announced it will supply acquiring and platform services for Flatpay's more than 100,000 merchants in seven countries, including Germany. The announcement names no terms. The model is easy to sell because the merchant only has to look at one number. But a flat rate never gives anything back: if the merchant's girocard share rises — for which the provider pays little — the rate stays the same. The economies of scale flow entirely into the margin underneath.

Revolut's pilot in London shows the counter-model: zero per cent fee, but till, account and customer all with the same provider. That is not a price cut either, but a shift in where the margin sits. None of the three models links the price to the merchant's growth.

I sell terminals and network services myself, and I earn from exactly this growth. That is precisely why I think it is short-sighted to keep all of it. A merchant who realises after three years that they are paying for twice as many transactions at the same unit price will cancel at the first opportunity. Locked-in prices do not buy the industry loyalty; they buy a wave of cancellations on a time delay.

What I am calling for

From acquirers and network operators, my own trade: volume tiers belong in SME contracts too, not only in negotiations with large corporations. Whoever sends more transactions through the network must pay less per transaction — automatically, from a threshold written into the contract, not on request. And for terms longer than 36 months, a price review at the half-way point belongs in the contract.

From retail associations: they should not only argue about mandatory card acceptance and acceptance rates but demand cost per transaction as a key figure. An obligation to accept cards, as discussed in the key points for 2027, only makes the problem bigger if nobody talks about the price per payment.

From legislators and supervisors: anyone considering an acceptance obligation should at the same time require providers to state their per-transaction fees in a uniform, comparable form — fixed component, percentage component, minimum fee. Today a small business compares three offers with three different pricing logics, and that is no accident.

And from merchants themselves: analyse your statements for the last twelve months by cost per payment, not by percentage. That single figure shows whether your provider shares in your growth or merely earns from it.

Card payments in Germany will keep growing at double-digit rates, and that is a good thing. But a market in which volume rises and the unit price stands still is not a functioning market; it is an annuity for whoever wrote the contract. Growth has to reach the merchant as a falling price — otherwise they are paying for their own success.