Payment cost optimization is the practice of analysing and reducing the total cost a business incurs in accepting and making payments. For a merchant the cost of a card sale combines interchange, scheme fees and the acquirer's margin, plus gateway, fraud tool, currency conversion and chargeback costs. The starting point is to measure the full cost per transaction by payment method, card type and country, which usually requires interchange plus plus pricing so that each component is visible.
The main levers are interchange optimization, meaning sending the data that qualifies a transaction for a lower rate; least-cost routing of debit transactions; local acquiring to avoid cross-border fees; steering customers toward cheaper methods such as bank transfers; and renegotiating provider fees. Cost is weighed against revenue: a cheaper route that lowers the authorization rate can lose more in declined sales than it saves in fees.