Credit Card Payments: What Every UK Treasury Leader Should Know

Credit cards are the backbone of everyday buying, but they also bring hidden costs and security challenges that can bite a treasury’s bottom line. If you’re handling cash flow, you’ve probably seen the impact of merchant fees, chargebacks, and settlement delays. This guide cuts through the jargon and gives you straight‑forward advice you can use right now.

How Credit Card Payments Really Work

When a customer swipes or clicks, the transaction travels through four players: the cardholder, the merchant’s acquiring bank, the card network (like Visa or Mastercard), and the issuing bank that holds the cardholder’s money. Each step adds a small fee – typically 1‑2% of the sale plus a flat charge. The acquiring bank passes the net amount to the merchant after deducting these costs.

Settlement can take one to three business days, which means cash sits in a pending state before it hits your accounts. For a treasury team, the timing matters because it affects short‑term liquidity and forecasting. Knowing the exact schedule helps you plan working‑capital needs more accurately.

Tips to Reduce Card Transaction Costs

First, negotiate your merchant rates. Many providers quote a standard rate, but high‑volume businesses can often secure lower percentages. Bring your transaction data to the table and ask for a tiered structure that rewards volume.

Second, shift more sales to lower‑cost channels. Debit cards, ACH transfers, or even QR‑code payments usually carry smaller fees. Encourage customers to choose these options by offering small discounts or loyalty points.

Third, watch out for hidden charges. Some processors add fees for batch settlements, refunds, or PCI‑DSS compliance. Read the fine print and ask for a clear breakdown so there are no surprise deductions.

Finally, protect against chargebacks. Set up robust fraud detection, verify AVS (address verification service) matches, and keep clear documentation of every sale. The fewer disputes you face, the less you’ll lose to costly chargeback fees.

Keeping an eye on these details lets you tighten cash flow, lower expenses, and stay ahead of regulatory expectations. Credit card payments will keep evolving, but the fundamentals stay the same: understand the fee chain, manage settlement timing, and guard against fraud.

Whether you’re a seasoned treasurer or just starting to shape your payment strategy, applying these practical steps will make your credit‑card portfolio more efficient and less risky. Stay curious, keep the data close, and adjust your approach as the market shifts – that’s the recipe for steady, smart treasury management.