The small business banking sector has a secret that’s costing financial institutions millions in lost opportunities and damaged client relationships. While most providers claim to offer competitive payment processing solutions, the reality is far more complex and costly than advertised. Hidden fees, unpredictable pricing structures, and complex variable costs have created an environment where small businesses struggle to understand their true costs, and financial institutions find themselves explaining away surprise charges that erode trust and profitability.
At the heart of this problem lies a fundamental misalignment between how payment processors price their services and how small businesses actually operate. Traditional providers have built their revenue models around transaction-based fees, percentage-based charges, and a maze of additional costs that can multiply unexpectedly as businesses grow. This approach creates uncertainty for small businesses and puts financial institutions in the uncomfortable position of defending pricing they don’t fully control.
The Hidden Fee Problem: What SMBs Really Pay
When small business owners evaluate payment processing options, they typically focus on headline rates – the advertised percentages for credit card processing or per-transaction fees for ACH payments. However, these headline rates tell only a fraction of the true cost story. The reality is far more complex and expensive than most business owners realize when they sign up for services.
Take a typical competitor pricing structure as an example. Bill.com charges 49¢ per ACH transaction plus 2.9% for credit card processing, but then adds payout fees on top of these base rates. Melio follows a similar model with 50¢ ACH fees, 2.9% credit card rates, plus additional payout fees. These payout fees can significantly increase the total cost of processing, especially for businesses that need frequent access to their funds.
Autobooks takes a different approach but creates its own complexity with 1% ACH fees and 3.49% credit card processing. For small businesses processing significant ACH volumes, that 1% fee can quickly add up to substantial monthly costs that weren’t apparent during the initial evaluation process.
The problem extends beyond just the fees themselves. These variable, transaction-based pricing models create unpredictable monthly costs that make it nearly impossible for small businesses to budget effectively. A seasonal business might see their processing costs triple during busy periods, not because they’re processing more volume (which they expect), but because the fee structure amplifies costs in ways that aren’t immediately obvious.
The Transparency Challenge: Why Traditional Models Fail SMBs
Small business owners need predictable, understandable costs to run their businesses effectively. When payment processing fees vary based on transaction types, volumes, timing, and additional service charges, it becomes nearly impossible for business owners to accurately project their costs or evaluate the true value of different service providers.
This complexity creates several problems that extend beyond just the immediate cost impact. Small businesses often discover unexpected fees months into their service relationships, leading to frustration and eroded trust in their financial services providers. The unpredictability makes cash flow planning more difficult, as business owners can’t accurately predict their payment processing expenses from month to month.
For financial institutions, these complex pricing structures create relationship management challenges. Business bankers find themselves in the uncomfortable position of explaining fees they don’t control to clients who feel misled by the original pricing presentations. This dynamic undermines the trusted advisor role that successful business banking relationships require.
The transaction-based fee model also creates perverse incentives that don’t align with small business success. When payment processors make more money from higher transaction volumes and values, their interests aren’t necessarily aligned with helping businesses optimize their cash flow or reduce their costs. In fact, the most profitable clients for traditional processors are often those paying the highest fees.
Finli’s Approach: Transparent SaaS Pricing
Finli has fundamentally reimagined how payment processing should be priced for small businesses and the financial institutions that serve them. Rather than following the industry standard of complex, variable fee structures, we’ve adopted a straightforward subscription model that eliminates uncertainty and aligns our success with our clients’ success.
With Finli, there are no hidden fees for you or your small businesses. Our pricing model is built around a simple subscription structure based on the number of businesses you’d like to support, rather than transaction volumes, payment types, or processing amounts. This approach eliminates the confusing, unpredictable variable fees other providers offer and creates true cost transparency for both financial institutions and their small business clients.
The core of Finli’s competitive advantage lies in our ACH processing approach. While competitors charge anywhere from 49¢ to 1% per ACH transaction, Finli offers 0% ACH processing fees. For small businesses that rely heavily on ACH payments – which includes most service-based businesses, subscription companies, and B2B enterprises – this difference can represent thousands of dollars in annual savings.
Our credit card processing remains competitive at 3% while eliminating the additional payout fees that competitors layer on top of their base rates. This means the rate you see is the rate you pay, without surprise charges that appear on monthly statements weeks after transactions are processed.
The Financial Institution Advantage: Revenue Control and Predictability
Beyond the obvious benefits to small business clients, Finli’s pricing model creates significant advantages for financial institution partners that extend far beyond simple cost competitiveness. Our FI partners have the ability to resell the business licenses to SMBs at their rate of preference and keep 100% of the non-interest income. This revenue control capability transforms payment processing from a commodity service into a strategic profit center.
Traditional payment processing partnerships typically involve revenue sharing arrangements where the financial institution receives a percentage of processing fees. These arrangements create several challenges including unpredictable revenue streams that fluctuate with client processing volumes, limited control over pricing presented to clients, and dependency on processor pricing decisions that can change without notice.
Finli’s subscription model enables financial institutions to establish predictable revenue streams from their SMB client relationships. Rather than hoping for high processing volumes to generate meaningful revenue sharing, FIs can build sustainable income based on the number of active small business relationships. This predictability enables better financial planning and more accurate revenue forecasting.
The ability to control pricing also enables financial institutions to use payment processing as a relationship tool rather than just a revenue source. FIs can choose to offer highly competitive rates to attract new clients, premium pricing for enhanced service levels, or bundled pricing that encourages broader relationship utilization.
Competitive Analysis: The True Cost Comparison
When comparing the total cost of ownership across different payment processing options, Finli’s advantages become even more pronounced. A small business processing $10,000 monthly in ACH payments would pay $100 per month with Autobooks’ 1% fee structure, $490 monthly with Bill.com’s per-transaction model (assuming average transaction sizes).
For businesses processing mixed payment types, the savings compound quickly. A service business processing $5,000 monthly in ACH payments and $3,000 in credit card payments would face the following monthly costs: Autobooks would charge $50 for ACH plus approximately $104.70 for credit cards, totaling $154.70 monthly. Bill.com and Melio would charge similar amounts plus additional payout fees that could add $20-50 monthly depending on payout frequency.
Finli’s approach would charge $0 for ACH processing plus $90 for credit card processing, totaling $90 monthly with no additional payout fees. The annual savings for this typical small business would exceed $700, representing meaningful cost reduction that directly impacts profitability.
Beyond Cost: The Strategic Value of Pricing Transparency
The benefits of transparent pricing extend far beyond simple cost savings. Predictable costs enable small businesses to budget more effectively, plan for growth more accurately, and focus their energy on building their businesses rather than managing payment processing complexity.
For financial institutions, pricing transparency creates opportunities for deeper, more consultative relationships with small business clients. Rather than fielding complaints about unexpected fees or explaining complex pricing structures, business bankers can position themselves as trusted advisors who provide clear, understandable solutions.
The subscription model also creates natural opportunities for relationship expansion. As small businesses grow and need additional services, the predictable cost structure makes it easier to evaluate and justify additional service investments. This dynamic encourages organic relationship growth and increases client lifetime value.
The Future of SMB Payment Processing: Subscription vs Transaction Models
The financial services industry is gradually recognizing that transaction-based pricing models don’t align well with small business needs or modern banking relationship strategies. Forward-thinking financial institutions are moving toward service models that provide predictable value at predictable costs, creating stronger client relationships and more sustainable revenue streams.
Finli’s subscription approach represents the future direction of small business financial services – transparent, predictable, and aligned with client success. As competition in the SMB banking sector continues to intensify, the financial institutions that can offer the most straightforward, client-friendly pricing will capture disproportionate market share.
The trend toward subscription-based business models across all industries reflects a fundamental shift in how businesses prefer to purchase services. Small business owners, who are increasingly sophisticated in their technology adoption and service expectations, expect the same transparency and predictability from their financial services providers that they receive from their software subscriptions.
Implementation and Client Communication: Making the Switch
Transitioning from traditional fee-based payment processing to Finli’s transparent subscription model requires thoughtful client communication and change management. However, the conversation with small business clients is remarkably straightforward when the value proposition is clear cost savings and predictable expenses.
Financial institutions implementing Finli’s pricing model often find that the transparency becomes a significant competitive differentiator in new client acquisition. The ability to provide clear, understandable pricing without complex fee schedules or hidden charges resonates strongly with small business owners who have been frustrated by traditional payment processing experiences.
Existing client conversations focus on the concrete savings opportunity and the elimination of billing complexity. When small business owners can see exactly how much money they’ll save monthly and annually, the value proposition becomes immediately apparent.
Takeaways
The choice between hidden fees and transparent pricing represents more than just a tactical pricing decision – it’s a fundamental strategic choice about how financial institutions want to position themselves in the small business market. Institutions that embrace transparency and predictability will build stronger, more profitable relationships with small business clients who increasingly demand straightforward, honest service provider relationships.
Finli’s subscription-based approach eliminates the pricing complexity that has plagued small business payment processing for years while creating new revenue opportunities for financial institution partners. In a market where trust and transparency are becoming the primary differentiators, the institutions that can offer the most straightforward pricing will win the most valuable client relationships.
The era of hidden fees and unpredictable payment processing costs is ending. The financial institutions that recognize this shift and embrace transparent, subscription-based pricing models will be positioned to capture the most desirable small business clients while building more predictable, profitable service portfolios.
Ready to offer your small business clients transparent, predictable payment processing without hidden fees? Contact Finli today to learn how our subscription-based pricing model can transform your SMB banking relationships while increasing your non-interest income.
