When you hear about October Surprises on the news you probably assume it’s an election year.
Turns out it could just be Shift4.
The card networks make interchange updates every April and October, and boy did Shift4 really lean into the latest one to pile drive their customers victims.
Let’s work through the math.
First Shift4 is converting any Interchange plus merchant to their SimpleChange.
We bet it’s neither simple nor transparent.
At least you can look up interchange tables readily. Where does a merchant find a SimpleChange table? We simply don’t know how much additional margin Shift4 is bilking here.
But if that free payments margin wasn’t enough for Shift4, they piled on some other goodies.
Each Shift4 merchant transaction is going to incur an additional cost of 3 basis points.
And 2 cents.
Oh, and another $0.0025 for a “Bank Sponsorship Fee” (WTF is that?!).
Let’s not forget that additional transaction fee of 1.5 cents for “PCI transactions”.
By our math we’re talking about an additional 3.75 cents per transaction, plus 3 basis points.
And a $2 monthly statement fee.
And a $20 quarterly fee, which comes to $6.66 per month (surely the 666 is just a coincidence, guys).
Woof, we’re winded in calculating all these fees. Can you just tell us what it means for the average merchant?
Of course we can.
Assume a $500,000 GPV merchant with a $30 average check.
3 bps on $500K = $150.
16,666 transactions per year @ 3.75 cents / txn = $624.98.
$8.66 in monthly fees * 12 months = $103.92.
This merchant would pay AT LEAST an additional $878.90 per year to Shift4 for… well, nothing.
Nobody said going to space was cheap, y’all.
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