A consultant says Worldpay, now owned by Global Payments, will add a $699 yearly fee to merchant statements this December, as rivals crowd the market.
Businesses that take card payments through Worldpay may see a new $699 yearly fee on their December statement. A merchant consultant posted part of a letter from Global Payments, which now owns Worldpay, on LinkedIn. The company did not immediately respond to a request for comment, so the details come from that posted letter.
Matt Rej, a partner at Merchant Cost Consulting, said the first charge will hit statements this December. He added that it comes on top of other increases from Worldpay this year. The letter blames the fee on government and industry regulations that have changed what payment systems must do. Rej questioned that reasoning.
Global Payments finished its $24.25 billion purchase of Worldpay less than a year ago. That size could give it more power to set prices. But analysts say the market is crowded. In its own earnings release last week, the company acknowledged increased competition.
Newer financial technology firms are pushing hard with newer tools. Older players such as Fiserv, Shift4 and Adyen are also feeling the squeeze. Analysts at R.W. Baird wrote that pricing pressure is a constant threat. Others noted that shoppers are stretched by inflation, which makes price hikes harder for merchants to pass along.
Global Payments says its Genius point-of-sale brand, launched last year, is in 65% more merchant locations than a year ago, and bookings more than doubled. A point-of-sale system is the register and software a store uses to ring up sales. Analysts at William Blair still argue Genius is not competitive on technology.
The company is also reportedly considering a sale to its large shareholders GTCR and Clayton, Dubilier & Rice. William Blair gave that deal less than a 50-50 chance, partly because of about $22 billion in debt. Small payment firms are also consolidating. PayCompass merged with two other firms in September, and Butter Payments sold its assets.
The material does not say which clients will be charged, whether any will be exempt, or how Global Payments will respond to the criticism. The company has not commented. Whether a possible sale changes its pricing plans is also unclear.
If you use Worldpay, check your December statement for a $699 annual fee and compare other providers before accepting it.
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