Electronic Payments International published Baxter’s analysis of the “mass exodus” of small businesses from credit card processing, revealing how unsustainable fee structures consuming 3% or more of every transaction are driving SMBs toward ACH and real-time payment alternatives. The comprehensive piece examines the stark economics driving this shift: while credit card fees range from 2.6% to 3.5% plus fixed costs, ACH processing averages just $0.29 per transaction—meaning a $1,000 payment costs 29 cents versus $26-35 in credit card fees. Baxter explores how governments worldwide have invested billions in real-time payment infrastructure specifically designed to bypass traditional card networks, with systems like FedNow, Europe’s SEPA, and India’s UPI creating a global ecosystem of instant, low-cost alternatives.
The article positions this transformation as economic survival rather than technological innovation, highlighting how real-time payments reached 266.2 billion transactions globally in 2023 with 42.2% year-over-year growth. Baxter warns that early adopters are gaining insurmountable cost advantages while competitors remain trapped in expensive payment structures, projecting that real-time payments could replace $18.9 trillion in business transactions by 2028. The piece emphasizes how mid-size manufacturing operations are systematically migrating high-volume transactions away from card networks, recognizing that this shift represents competitive survival in markets where payment fees directly constrain growth through operational complexity and cash flow disruptions.
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