How to Run a PSP RFP That Gets You Better Terms

The majority of merchants overpay for payment processing. Not because they were naive when they signed their original agreement — most got a reasonable deal at the time — but because payment volumes grow, contracts aren't revisited, and PSPs don't proactively offer better terms to existing customers who aren't asking for them.

Your acquirer has complete visibility of your transaction data. They know your volume, your card mix, your average transaction value, your chargeback rate, and your revenue trend. With that information, they know exactly where their margin sits — and whether you've asked a competitor for a quote recently.

A well-structured RFP process changes that dynamic completely. And the typical outcome — across clients we've worked with — is 15–30% reduction in effective processing cost, often without switching provider at all.

Why Most Merchants Don't Run RFPs

There are a few reasons merchants avoid formal payment reviews, none of which hold up to scrutiny:

• "It's too complicated to switch." Possibly true for a full integration migration. But the primary goal of an RFP isn't necessarily to switch — it's to get better terms from your current provider by demonstrating you've done the market work.
• "We've been with them for years, they know our business." This is exactly why you should review. Long-standing relationships get commercially complacent. Your volume has almost certainly grown, your risk profile has likely improved, and pricing that was competitive four years ago often isn't now.
• "We don't know what to ask for." This is the legitimate blocker — and it's solvable.

What to Include in Your RFP Brief

The quality of your RFP responses depends almost entirely on the quality of what you give vendors to work with. A strong brief should include:

• 12 months of transaction data broken down by card scheme (Visa/Mastercard/Amex), card type (debit/credit/commercial), geography (domestic/EU/international), and average transaction value. This is what PSPs price from — the more accurate it is, the more accurate (and therefore competitive) the response.
• Current processing volumes and growth projections. PSPs price partly on trajectory. A merchant doing £10M today heading to £25M in two years is a more valuable customer than the volume alone suggests.
• Your chargeback rate and dispute management approach. A well-managed chargeback rate (<0.5%) is a commercial positive. Make sure it's visible in your brief.
• Your current fee structure — or at least a clear statement that you're seeking IC++ pricing and want itemised fees for auth, capture, 3DS, gateway, FX and any other relevant line items.
• Your integration requirements — direct API, hosted payment page, tokenisation needs, recurring billing, subscription management.
• Your timeline and decision process. Being clear that you're running a structured review with a defined decision date creates genuine urgency.

The Pricing Levers to Push On

When reviewing responses, these are the areas where the most negotiating room typically exists:

Acquirer markup rate

The headline IC++ markup is the starting point. For a merchant processing £10M+ annually in UK consumer cards, a competitive markup is 0.10–0.20%. Commercial and corporate cards will be higher — but the markup on those should also be separately negotiated if they represent significant volume.

Minimum per-transaction fees

Often buried in proposals. Ask explicitly: is there a minimum per-authorisation, and if so, what is it and under what circumstances does it apply? For businesses with lower average order values, this can be as impactful as the markup rate.

3DS and authentication fees

Authentication is now universal for online payments under SCA, which means 3DS fees apply to virtually every transaction. A fee of £0.02–£0.03 per transaction is defensible. Anything above £0.05 warrants pushback.

Chargeback and dispute fees

Chargeback fees of £10–£15 per dispute are common. If your chargeback rate is below 0.3%, you have grounds to negotiate this down further — or to cap the exposure as a fixed monthly amount.

FX conversion margin

If you process any meaningful international volume, this line item is almost always negotiable. For merchants processing significant cross-border volume, shaving 0.25% off FX conversion can be worth six figures annually.

How to Structure the Process

A well-run PSP RFP typically follows this timeline:

1. Weeks 1–2: Prepare brief and data pack. Identify 3–5 providers to include (always include your incumbent).
2. Week 3: Issue RFP brief. Set a clear deadline for initial responses (typically 10–14 business days).
3. Weeks 5–6: Review responses, shortlist to 2–3, and schedule clarification calls with shortlisted providers.
4. Weeks 7–8: Request best and final offers from shortlisted providers. Go back to incumbent with competing offers if appropriate.
5. Week 9: Make decision and notify all parties.

A Note on Switching

Running an RFP doesn't mean you have to switch — and often the best outcome is that your incumbent matches or beats the competition to retain your business. But the willingness to switch has to be real. If your current provider believes there's no genuine competition, they have no incentive to move. The credibility of the process is what creates the commercial outcome.

If you do end up switching, the integration effort is typically manageable for most merchants — most modern checkout integrations are modular enough that a PSP migration is a 4–8 week development project, not a wholesale rebuild.