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Getting Ahead of Payments as a Head of Payments – Part One
Our payment experts provide three industry trends merchants should be watching and a few words of wisdom for those seeking to better understand their data in this two part blog series.
Payments don’t seem to be getting any easier. Specifically, payments data can be difficult to understand, especially with so many other tasks on the never-ending to-do list. Our team of experts are in the weeds of payments data every day and are dedicated to finding the trends that matter most to merchants and their bottom line. Among many key – and sometimes competing – priorities, the cost of payments is always an important consideration for merchants; I’ve sat down with a few of our experts to discuss what industry trends merchants should be watching when analyzing their data along with some helpful tips for the payments leader that’s looking to make the most of their data.
Commercial Cards
The cost of accepting commercial cards is growing 1 in 5 dollars of card spend in the United States are commercial cards, totaling $2.15 trillion in 2025.1 Certain merchants may see this trend more than others, but it’s important for all to follow. Fees and programs associated with commercial cards from the networks are undergoing updates that will impact merchants. Interchange rates can vary on small or large business commercial cards in addition to the environment where the commercial card was used (i.e., card-present or card-not-present). The transaction data merchants send also has impacts on the fees associated with their commercial card traffic.
Visa’s recent updates to their Commercial Enhanced Data Program (CEDP) to sunset Level 2 rates, means merchants must make changes to qualify for Product 3 rates, or else experience a 75-basis point increase to the associated interchange fee. CMSPI estimates a $2 billion cost impact if merchants who qualified for Level 2 default to Product 1 rates.
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“With Visa’s recent elimination of the commercial Level 2 category, merchants must consider a cost-benefit analysis when determining their strategy for passing transaction data. Level 3 can drive significant interchange savings, but there is often a technical resource uplift that is required to unlock the cheaper rates. Achieving Level 3 requires line-item data points, such as item quantity and product code, to be passed along in the transaction message. Merchants should work with their payment processors to understand what data points are collected today and the feasibility of meeting Level 3 criteria.”
Capital One/Discover Merger
Capital One’s acquisition of Discover in May 2025 has brought a shift in how debit transactions are routed for merchants. The reissuance of debit cards from their previous signature networks to Discover’s Pulse has also meant a shift from cards being regulated to unregulated. Unregulated cards come with higher interchange for merchants to monitor as the reissued cards continue to enter their transaction data.
For some merchants, this shift could have an impact on existing debit incentives, specifically if the incentives are volume based – potentially missing a threshold with volume moving towards Discover and away from other networks. It is important for merchants to stay on top of this shift in volume to avoid unmet volume requirements.
To Be Continued…
In Part Two we will look at another payment trend merchants should be monitoring in addition to some words of wisdom from our very own payment experts. d
Our Payments Experts Interviewed for This Blog:
Damian Diaz,
Associate ConsultantReed Egan,
Senior Associate ConsultantAnil Tharani,
Senior Associate ConsultantSources
+1 Euromonitor 2025
See what Smarter Payments Intelligence can do for you.