A Legacy Processing Relationship That Cost an Infrastructure Group More Than $3 Million a Year

A North American infrastructure solutions provider had never reviewed its card processing costs across the enterprise. One headquarters audit produced over $3 million in annual savings, and more than 90 percent of its divisions followed.

Infrastructure ServicesMulti Division AuditInterchange OptimizationAmex Rate Alignment

$3M+

Combined annual savings

20+

Divisions in scope

90%+

Divisions now enrolled

$500K+

Junk fees removed each year

The organization

Eighty plants, twenty divisions, no single view of payments

The client is a major North American infrastructure solutions provider serving the water, energy, communications and transportation sectors. It operates nearly 80 manufacturing plants and distribution centers across the United States and Canada.

Structurally it is a holding company, and its divisions carry real autonomy. That model works well for operations. For payments, it produced fragmented systems and a different contract in almost every business unit.

The initial challenge

Costs that had never been examined

Payment processing had never been evaluated comprehensively. Each division negotiated its own agreement, ran its own technology platform, and in several cases sat on a payment gateway that had not been updated in years.

Leadership was not resistant to the idea of an audit. They were resistant to the disruption. Finance teams were already stretched, and a company wide project touching 20 divisions looked like a large ask for an unproven return.

The approach: prove the value at headquarters first

Rather than mandate an enterprise wide change, weAudit started with a single headquarters audit. The purpose was to produce a documented, defensible number that divisional leaders could see for themselves before being asked to commit any of their own time.

That decision mattered more than any individual finding. A mandate from corporate would have been met with the usual objections about bandwidth. A headquarters result, presented with the statements and the math behind it, removed the argument entirely.

What the audit found

Four separate issues, none of which appeared on the statement as a problem.

Processor markup

Headquarters was paying a processor markup of 0.07. weAudit renegotiated it to 0.02, on the same volume, with the same processor relationship still available.

Six figure annual savings

Accumulated junk fees

Years of small add on fees had been layered into the agreements. Individually each one was easy to ignore. Together they were the second largest line of recovery in the audit.

$500,000+ per year eliminated

Interchange optimization

Outdated gateway technology was pushing transactions into higher cost settlement categories by default. Correcting how transactions were qualified and submitted was the single largest source of savings in the engagement.

Millions in additional annual savings

American Express alignment

The Amex discount rate was brought into line with the client’s Visa and Mastercard rates. In this industry that outcome is rare enough that it is worth stating plainly: Amex matched Visa and Mastercard.

Rare industry precedent

The outcome

The headquarters audit alone produced more than $3 million in combined annual savings. Once that number was circulated internally, the conversation with the divisions changed completely.

Divisional hesitation did not have to be overcome with policy. It disappeared on its own. More than 90 percent of the company’s divisions are now enrolled in ongoing audit and monitoring services, and the enterprise finally has a single view of what it pays to accept a card.

Why the sequencing worked

Decentralized organizations rarely adopt a cost initiative because corporate asked them to. They adopt it when a peer division can point at a real number. Starting small was not a compromise. It was the fastest available path to full enrollment.

When you are looking to cut costs by cutting vendors, this is one that is off limits.

Corporate Controller, North American infrastructure solutions provider

Why this case matters

Decentralization hides cost. When every division owns its own processing contract, nobody owns the total, and the total is where the money is. The gap between the best rate inside this company and the worst was not a negotiating failure by any one division. It was the predictable result of 20 separate conversations with an industry that prices each one individually.

The other lesson is about gateway age. A gateway that has not kept pace with the twice yearly interchange rule updates from Visa and Mastercard does not throw an error. It simply settles transactions at a higher cost category, quietly, on every transaction, for as long as it stays in place. You can read more about how those costs are structured in our guide to interchange fees.

What would an audit find in your organization?

weAudit works on a contingency basis. If we do not find savings, there is nothing to pay. Our audit process is documented start to finish, and our pricing is published.

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Client identity withheld at the client’s request. All figures are drawn from the engagement record.