Smaller Canadian issuer identifies up to C$1.6M in network fee savings, 28% of its fees
At under C$2B, this Canadian issuer's network fees ran well above benchmark for its size. A 4-6 week review found up to C$1.6M a year, 28% of its network fees and nearly double the typical 7-15% range, most of it services the bank could simply opt out of.
| Client type | Card issuer |
|---|---|
| Size | Under C$2B annual card purchase volume |
| Market | Canada |
| Scope | Visa and Mastercard issuing network fees |
| Analysis time | 4-6 weeks |
| Line items flagged | 150 |
| Potential savings | Up to C$1.6M a year |
| Share of network fees | 28% |
| Savings relative to volume | 10-20 bps |
| Ongoing | Network Fee Tracking |
What did the review find?
The bank's network fees were running well above industry benchmarks for a program its size, and the review flagged 150 line items.
C$0.28M of the opportunity was quick wins, and 87% was rated medium or high likelihood of realization.
Where did the savings come from?
Four of every five dollars came from opting out of services the bank didn't need.
| Category | Amount | Share |
|---|---|---|
| Opt-out of unnecessary services | C$1.3M | 81% |
| Best practice alignment | C$0.2M | 15% |
| Fees to challenge | C$0.1M | 4% |
| Total | Up to C$1.6M | 100% |
How long did it take, and what data was needed?
The analysis took 4-6 weeks and used 12 months of network invoices and volume data. No system integration was required.
What happened after the review?
The client moved to CardTraq Network Fee Tracking to monitor implementation of the savings and flag new fees as they appear. Network fees change throughout the year, so ongoing tracking keeps the savings from slipping away.
What does this mean for smaller issuers?
Fixed network fees weigh hardest on smaller programs. Some charges are billed per service, report or account rather than per dollar of volume, and minimums apply, so a smaller program pays more per dollar for the same set of services. See The Card Network Scale Penalty: Why Smaller Issuers Pay More.
That is why savings at smaller issuers can run well above the typical range, as they did here.
Questions and answers
Do smaller card issuers pay more in network fees?
Relative to volume, often yes, because some network fees are charged per service, report or account rather than per dollar of volume, and minimums apply. This issuer's savings came to 10-20 bps of volume, compared with 1-6 bps at the larger issuers in these case studies.
How much can a smaller issuer save on network fees?
In this review, up to C$1.6M a year, equal to 28% of network fees and nearly double the typical 7-15% range.
What are quick wins in a network fee review?
Savings that can be captured quickly, often by switching off a service that isn't needed. In this review, C$0.28M was quick wins.
Recurring annual savings from a 12-month review of network billing.
Most programs we review are paying network fees they don't need to. A review takes 4-6 weeks and needs only your network invoices and volume reports.
Get a network fee review