Convenience & Fuel Merchant Case Study

This large merchant engaged CMSPI to undertake a holistic review of their debit routing arrangements.

This large convenience and fuel merchant engaged CMSPI to undertake a holistic review of their debit routing arrangements, using our expertise to validate their current rates and ensure they were in a market-leading position.

We were able to identify significant opportunity in the client’s debit routing and rates, delivering vital savings both prior to and amidst the COVID-19 crisis – which saw the fuel industry suffer from over $38.7 billion in losses between February 28th and May 31st 2020.

Truly optimized routing is particularly difficult to achieve in this industry, with the client facing significant challenges with reconciling data across two different Points of Sale – at the pump and in-store – as well as across multiple processors. Pre-authorizations proved a further difficulty for the client, incurring additional fees and creating a further layer of complexity.

For a client of this size, aggregating BIN level data internally, and then conducting an in-depth analysis to identify inefficiencies and opportunities, also proved particularly complex: so our experts partnered with the merchant to drill down into challenges, opportunities and inefficiencies in their debit routing arrangements.

CMSPI Solution

Through in-depth analysis and audit, our payments experts identified a significant cost savings opportunity for the client. By conducting a rigorous RFP, we were able to deliver substantial savings – securing preferential rates, managing routing considerations, and ultimately holding all stakeholders in their supply chain to account.

Further, with our unique, detailed insights into the client’s transaction mix, we were able to identify exactly what combination of incentives will work best for them – and we continue to ensure they perform against those incentives.

Although the client already had a process in place to audit and optimize their payments arrangements, our work and knowledge of the payments landscape enabled us to transform the client’s debit routing arrangements into a more streamlined process – delivering value above and beyond what they could achieve without independent insights.

CMSPI continues to monitor and audit the client’s debit routing on a monthly basis, continuously responding to changes in the payments mix and any challenges they may present. Due to the success of the project, the partnership has also expanded to secure other efficiencies within the client’s card processing relationships.

Benefits Delivered

By choosing to work with CMSPI, our client has benefitted from engaging with independent payments experts, who act solely in the interest of merchants to deliver the right solution for them. Due to our close, senior relationships with all key players in the payments supply chain, we were able to secure preferential rates to deliver savings above and beyond what the client had achieved through internal optimization.

Working alongside the largest retailers in the fuel industry, and retailers across other industries, we’re able to benchmark and provide unique insights into market-leading rates – ensuring our clients’ costs are minimized as much as possible.

By using our in-house Debit Optimization Tool (DOT), we were able to provide unrivalled visibility into the fuel merchant’s current debit arrangements and incentives, securing savings of $5 million per annum.

As we continuously monitor our client’s arrangements, during the COVID-19 pandemic we were also able to realign and renegotiate with the client’s suppliers to reflect the market changes the fuel industry was experiencing and ensure every transaction was routed optimally – releasing significant savings at an incredibly difficult time for retailers.

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