Rising Payment Costs Force Merchants to Rethink Payment Strategies

Wind River Payments report reveals that nearly half of merchants are encouraging their customers to pay with cash and debit cards as margin pressures mount and payment processing fees become the fastest-growing operating expense.

Wind River Payments’ 2025 Payments Report, which surveyed more than 200 independent software vendors (ISVs) and merchants across the U.S., illustrates the profound impact of increasing processing fees on businesses’ pricing, profitability, and payment strategies. The majority (69%) of participant merchants have already changed how they accept or process customer payments due to recent economic challenges. Another 12% plan to make changes shortly.

Here are the main changes brought to merchant payment strategies by the rising payment cost:

• 46% of businesses raised prices this year to offset higher expenses linked to payment processing;
• nearly 70% of merchants changed the way they accept or process payments: 36% added surcharges on credit transactions, 25% encouraged consumers to use lower-cost payment methods such as debit and ACH, and 23% started offering cash discounts to steer customers toward cheaper options;
• 29% of respondents claim payment processing fees are their fastest-growing operating expense;
• 96% of software providers (ISVs) that deal with integrated payments are exploring new ways to monetize them this year.

As for other important study findings, Wind River Payments discovered that fraud remains widespread in the payment industry, with nearly two-thirds of merchants affected in the past year. Frustrated by ongoing losses, the vast majority (88%) say they would willingly pay more for stronger fraud prevention tools. The most common threats include fraudulent chargebacks (28%), return and refund fraud (25%), and phishing or scam attempts (20%) aimed at merchant accounts or staff. These incidents are taking a tangible toll — 34% of merchants report direct financial losses, 27% suffer revenue delays, and 15% cite damage to customer trust.

Payment challenges are also cutting into revenues. Almost 30% of merchants have lost income in the last three months due to payment-related issues, including slow checkouts (15%) and limited support for customers’ preferred payment methods (19%). Meanwhile, digital wallet adoption in the U.S. remains slow: 85% of merchants say fewer than half of their transactions involve wallets, and for most, that share is below 25%.

Overall, the report paints a picture of a payments landscape under pressure, where fraud, cost, and evolving consumer habits are forcing merchants to adapt fast.