The payments process has become more costly and complex for large merchants to manage. Many have responded by professionalizing the function, but that alone has not produced strong results. In BCG’s 2026 survey of nearly 500 large merchants (companies with annual revenue ranging from $50 million to $10 billion), 79% reported that their payments costs had risen over the previous five years, and less than one in ten said that they had managed to bring them down.
The challenge now is to turn a more professional payments function into better business results. Acquirers can help merchants do just that.
Most Merchants Have the Pieces, but Few Have the Model
Most merchants have invested in payments, but far fewer have put the full model together. Among survey respondents, 89% have dedicated payments teams, 43% use dynamic orchestration or a deliberately chosen single-acquirer model, and 28% treat payments as a profit center. Only 12% combine all three. (See Exhibit 1.)
For 72% of large merchants, the payments mandate still centers on reducing complexity and controlling costs. However, the 28% that manage payments as a profit center take a broader view. They use closed-loop wallets, co-branded cards, embedded financial services, and loyalty integration to generate revenue, retain more value, and strengthen customer relationships. They also manage payments more rigorously. Compared with cost-center merchants, they are more likely to track authorization rates (by 21 percentage points), to track false-positive rates in fraud (by 17 percentage points), to measure conversion (by 12 percentage points), and to review their acquirers annually (by 8 percentage points).
The 12% of large merchants that combine all three practices outperform the survey average. Their conversion and authorization success rates are 2 percentage points higher, their fraud rates are 0.5 percentage point lower, and their share of transactions stopped by fraud controls is 1 percentage point lower.
What Leaders Do Differently
Across five areas central to payments performance—customer experience, cost, fraud, resilience, and revenue—leaders make more deliberate choices and manage performance more closely:
- Engineer an invisible payments experience. Leading merchants make checkout as seamless as possible. On the front end, that means creating a simple interface, personalizing the payments options shown at online checkout, and offering a carefully tailored mix of local payment methods. Behind the scenes, they replace basic retry rules with layered recovery systems that use machine-learning routing, decline-specific timing, and multichannel dunning. Netflix uses this approach as part of a payments model that has helped keep monthly churn at 2% to 3%, among the lowest levels in streaming.
- Match the acquiring model to the business. More providers do not necessarily mean better performance. A leading French sports brand, for example, uses an in-house orchestration layer and smart routing to manage multiple providers across markets. Louis Vuitton has chosen a different model, consolidating with a single global acquirer to unify its in-store and online payment infrastructure, thereby improving customer experience and operational efficiency. Leaders choose the setup that fits their scale, footprint, and internal capabilities, and then manage it closely against cost, conversion, and resilience.
- Measure fraud and false positives together. Fraud losses tell only part of the story. Payment systems can wrongly decline 2% to 5% of legitimate transactions, yet nearly half of merchants never quantify these false positives. Leaders manage fraud and false positives together, replacing static rules with adaptive machine-learning models that protect the business without turning away good customers.
- Build resilience across the payment stack. Leaders design for outages, building redundant connectivity, simplifying payments infrastructure, and establishing stand-in processing to accept payments when a provider goes down. In physical acceptance, that can mean simplifying fragmented terminal estates and terminal-management systems. They harden their cyber posture as part of the same rigorous operational discipline.
- Choose revenue opportunities that fit the business. Revenue models such as embedded finance, co-branded cards, and BNPL impose different economic and operating requirements. Co-branded cards need enough scale, loyalty, and customer engagement to justify their cost. Embedded finance depends on proprietary data and direct integration into the commerce flow, which makes it a better match for marketplaces and platforms. The strongest opportunities are those whose requirements are in harmony with the merchant’s underlying business model.
How Merchants Can Improve Payments Performance
For merchants that have not yet put the full model together, three actions are critical:
- Identify where payments cost the business money and customers. Trace costs and performance by market, channel, payment method, and provider. Look for fees above market, weak approval rates, checkout drop-off, fraud, and chargebacks. A global fashion and sports retailer performed this analysis across its five most important markets and achieved savings equal to 15% to 20% of its annual payments costs.
- Decide what should change and who should make it happen. Benchmark payment processes against relevant peers and leading merchants. Use that evidence to determine where to invest, which capabilities to keep inhouse, and where to use providers to deliver better results. In addition, test whether the current setup can support AI-led discovery and agent-initiated purchases.
- Bring the work under one plan with clear accountability. Sequence priorities around value and dependencies, assign responsibility, and track whether costs, conversion, and revenue are improving. Where decisions are scattered across markets or business units, bring the critical ones into a common operating structure. A global cruise line used this approach to centralize its payments strategy, reduce processing and vendor costs by $10 million, identify further savings, and quadruple its royalty revenue from a co-branded card program.
What This Means for Acquirers
About half of surveyed merchants benchmark their acquirers annually, and 44% have switched or added a provider in the past five years. (See Exhibit 2.)
Merchant satisfaction varies widely. For acquirers named as primary providers by at least ten respondents, the share of very satisfied merchants ranges from 17% to 71%. That 54-point spread leaves weaker incumbents exposed as merchants gain better tools to compare performance and move volume. Price is the leading reason that large merchants consider changing providers, but execution matters too. Declining authorization rates rank second, followed by reliability and fraud prevention. Dynamic orchestration sharpens that scrutiny by making results visible at the transaction level and allowing merchants to direct volume toward the acquirer that performs best.
Acquirers that want to hold and nurture these relationships need to respond on three fronts:
- Compete on value beyond the rate card. Acquirers need to show merchants where they are losing value and then help them recover it. Doing so requires a detailed view of approval rates, routing patterns, payment methods, fraud, provider costs, and checkout performance. It also calls for strengthening the core capabilities that merchants struggle to manage. For example, 39% use different acquirers for online and in-store transactions, creating an opportunity to provide a more consistent omnichannel service. In physical acceptance, acquirers can help simplify fragmented terminal estates and the associated services and logistics.
- Shift from vendor to specialized advisor. Acquirers should choose a clear basis for specialization, whether in the workflows of a single vertical or in complex payments across multiple international markets. Bringing in product specialists to develop solutions for complex business use cases can increase merchants’ adoption of value-added services by as much as 12 percentage points.
- Help merchants prepare for agent-led commerce. Acquirers should build the capabilities necessary to make agent-initiated transactions work, including agent authentication, tokenization, delegated consent, and clear liability rules. Demand is already emerging. In BCG’s survey, 73% of merchants say that they would switch acquirers for better support in this area, and 31% name acquirers or payment service providers as a preferred partner, second only to large technology platforms. Although platforms may own the interface, acquirers can differentiate in the transaction itself and capture more of the resulting volume.
The payments function today affects cost, customer experience, resilience, and growth. The large merchants that get the most from it have built their operating model to manage those outcomes together and have exercised the discipline to keep improving them.
That leaves acquirers with a clear role. They can help merchants unlock the value still trapped in their payment operations, turn better performance into measurable business results, and prepare for commerce increasingly shaped by AI agents. The providers that do this well can deepen their merchant relationships and compete for a larger share of transaction volume.
