Toast Pulls Epic Contract Switcharoo to 4x Their Payments Margin

We’ll begin by stating that we have no idea how systemic this is.

Was this a rogue sales agent?

Was it truly a mistake?

Or is it behavior that’s consistent with everything Toast does?

You be the jury.

Here’s how this went down, and thanks to Payment Authorities for sharing the details.

A merchant was solicited by Toast.

The merchant shared their processing statements since Toast would “match or beat”.

First, here’s the merchant’s statement.

It’s a pretty clear 5 cents and 5 basis points.

Next comes the Toast quote.

For some odd reason Toast decided that the merchant’s rate was 6 cents and 5 basis points. Maybe it’s a fat-finger error, but still, it’s a bit sloppy. Toast shows trivial savings, so cool, they “matched” the rate.

Now for the fun part.

The merchant decided this was fair and asked for the contract.

So Toast sent it.

The merchant signed it because, you know, what good is a man if you can’t trust his word that he’s going to match the rates he showed you on the contract he sends over afterwards?

Well, Payment Authorities read the contract.

After it was signed.

And fuck us if this isn’t a Payments Bro masterclass.

This poor merchant went from paying what he thought was 5 cents and 5 basis points to 15 cents and 30 basis points.

And on Amex it’s even worse!

That Amex rate ratcheted all the way up to 15 cents and 45 basis points.

We’re sure this was just a clerical error that happened to work out in Toast’s favor, right?

For a $109 average check, the merchant was previously paying 10.5 cents per transaction on Visa and Mastercard, and for a $91 average Amex check he was paying 9.6 cents per transaction.

Now that same merchant is paying 47.7 cents on a Visa and Mastercard transaction, and a whopping 56 cents on Amex transactions.

That’s a 350% increase in Visa and Mastercard fees, and a 480% increase in Amex fees.

So. much. value. created.

SaaS wasn’t discounted and there were no other rebates.

Just good ol’ fashioned fraud and abuse.

You gotta love that Toast culture: it’s the gift that keeps on giving.