UBS Payments Innovation Event Series "Competition in eCommerce Payments ..."

Research evidence excerpt

UBS Payments Innovation Event Series "Competition in eCommerce Payments ..."

tracking these changes. Importantly, while interchange is regulated in many markets,

scheme fees are less transparent and have been growing as a proportion of total cost.

The implication is that most merchants are structurally overpaying, not necessarily due

to PSP fee rates, but due to an inability to monitor and optimise increasingly complex

and dynamic fee stacks.

Monitoring, benchmarking and AI: wide gap between perceived and actual

optimisation

Our speaker argued that there is a significant gap between how merchants perceive

their optimisation capabilities and what is actually being done in practice. Despite

claiming multi-PSP routing or advanced orchestration, our speaker argued most

merchant monitoring functions remain relatively basic - e.g., routing transactions to

provider A and retrying with provider B if unsuccessful - rather than leveraging granular,

performance-driven decisioning at the issuer or BIN level. According to our speaker, in

many cases volume allocation can be driven more by contractual arrangements (e.g.,

fixed 80/20 splits) rather than real-time performance, and even fundamental concepts

(such as how retries are counted) are not consistently understood. At the same time,

monitoring capabilities are often limited: dashboards are reviewed periodically by

humans, meaning performance degradations (e.g., declines in specific channels, issuers,

or environments) can go unnoticed, particularly outside working hours, resulting in

silent revenue leakage. Our speaker stressed the importance of establishing a robust

baseline and benchmarking against market performance, citing examples such as

network tokenisation (driving ~3-6% uplift in authorisation rates) and updated