Taming the multitude of scheme fees: how finance teams can take back control
The European Commission’s recent investigation into payment network fees charged by card schemes has brought much-needed attention to the complexity and challenges financial institutions face with these costs. With shifting structures, automatic enrollments, and opt-out deadlines that often slip under the radar, scheme fees have long gone unnoticed due to a lack of visibility in finance departments. Managing them can be tough, but it’s more critical than ever for finance teams to stay on top of these charges to avoid unexpected hits to their budgets.
In light of this, we see a powerful use case for Kajo: supporting financial institutions in managing and minimising scheme fees by tracking opt-out deadlines and offering clear, up-to-date guidance on when and how to avoid unneeded costs.
The payment networks fee dilemma: automatic enrollments and missed opt-outs
Scheme fees cover a wide range of services from payment networks, from risk management to transaction support. These fees are integral to the payment ecosystem, but how they are introduced can cause headaches. Some payment networks start new services which often come with automatic enrollments and limited-time trial periods, leaving finance teams at banks scrambling to keep track of deadlines. If the bank fails to opt out before a trial period ends, it could result in charges for services it doesn’t need.
These fees can easily slip through the cracks, especially when finance departments overlook scheme bulletins that notify licensees of new services and associated costs. And if a bank relies on its processor for scheme compliance processing, these bulletins might not even make it to the right people. As a result, they might end up paying for a service that they neither use nor that fits their needs.
The impact of overlooked fees on the bottom line
Missed opt-out deadlines and unused services can lead to needless charges; charges that go unnoticed and unchallenged. Over time, these costs add up, eating into profits. For example, some organisations inadvertently pay for advanced fraud detection tools offered by card schemes even though they already have in-house internal systems that cover the same risks. Without visibility into these fees, finance teams may be paying for redundant services that chip away at profitability.
How Kajo helps finance teams at banks, cut hidden costs and regain control
Here’s how Kajo can be an effective tool for finance teams looking to gain visibility and control over these often-overlooked costs:
1. Opt-out tracking and alerts: Kajo makes it easy to track crucial opt-out deadlines tied to new services. Finance teams get notified about such bulletins, preventing missed deadlines and hidden charges.
2. Easy to find overview: Kajo’s “Search and Filters” section helps teams find announcements with financial impacts. With a transparent overview of opt-in, opt-out, and other bulletins with financial impacts, banks can make informed decisions.
3. Directory of payment networks updates: Many finance departments overlook payment networks bulletins, particularly when relying on third-party service providers, like payment processors. Kajo keeps all these updates organised and easily accessible, allowing teams to stay informed of any updates and changes relevant to their operations.
Tapping into Kajo’s power for finance teams
For finance teams at banks, managing payment scheme fees isn’t just about saving money. It’s about having control and visibility. With Kajo as an organised, centralised solution, finance teams can take a proactive approach and stay ahead by tracking deadlines, making informed decisions and improving the bottom line.
Kajo equips teams with everything they need to regain control over scheme fee changes and updates, keeping costs in check and ensuring banks pay for products and services they use.
Don’t let hidden fees eat into your revenue. Get in touch with us for a demo today.
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