Every time a customer taps their card at a register, a quiet negotiation plays out in the background: a fraction of the transaction moves from the merchant to a processor, then to a network, then to a bank.
And somewhere in that chain, a margin gets extracted that most business owners have never thought to question.
That indifference has been good for the payments industry. According to the Federal Reserve’s own 2024 Report on Payments – surveying nearly 5,000 small employers – credit card processing fees are the single most-common payments challenge small businesses face, ranking above slow-paying customers, fraud, or anything else.
Meanwhile, the Nilson Report found that U.S. merchants paid a record $187.20 billion USD in card processing fees in the same year – up 8.8% year-over-year, growing nearly three times faster than actual card payment volume.
And as per the Federal Reserve’s 2025 Diary of Consumer Payment Choice, credit cards now account for 35% of all consumer payments – their highest share on record.
In sum: more card volume, more fees, more mechanisms absorbing costs they were never thought to scrutinize.
That’s the industry Dimitri Akhrin, founder and president at merchant services partner BAMS, walked into – accidentally, as he tells it. And the one he has spent twenty years learning to work against.
“The idea of selling a service that almost every business needed intrigued me,” he recalled to StartupBeat. “Everyone I talked to either owned a business or knew someone who did.”
He was the third person hired at a small Brooklyn company, brought on to set appointments for senior sales reps pitching payment processing services across New York City. It wasn’t a career plan, but one piece of data he learned early reframed everything.
Research from MIT Sloan shows that credit cards neurologically “step on the gas” of consumer spending, activating the same domaminergic reward centers that respond to other stimuli – meaning customers don’t just find cards convenient, but they spend more freely because of them.
For merchants, a processing fee of around 3% to unlock that kind of uplift looked, on paper, like an obvious trade; the logic was clean, but the industry built around it was anything but.
A system designed to stay confusing
By 2006, most businesses accepting credit cards had been with the same provider since the late nineties. That inertia wasn’t accidental, but structural. The backend infrastructure processors and banks relied on was, to put it plainly, a mess.
“The tools were the equivalent of using Windows 95. Sadly, many of those systems still exist today,” Akhrin said.
Onboarding a single merchant meant manually entering over 700 fields into a platform with zero tolerance for error. Deposit reporting, commission tracking, and equipment configuration, for instance, each lived in separate, siloed systems; one wrong entry could freeze a deal or send you back to square one.
Meanwhile, real advantages sat unclaimed: rates had room to fall, equipment had evolved past dial-up, and next-day funding – which most merchants didn’t know existed – could be offered at no additional cost and landed, almost every time, as a genuine surprise.
The Federal Reserve’s data shows that retail and hospitality businesses, which depend most heavily on card payments, disproportionately cite processing fees as a burden, yet rarely challenge their providers.
The gap between what merchants were paying and what processing actually cost, then, became the business. It still is.
The client from Red Hook
One of Akhrin’s earliest sign-ups was a commercial hauling company operating out of a warehouse in Red Hook, Brooklyn. The business rented production equipment to NBC and other television studios filming around the city – just a handful of transactions per month, but each one exceeding $50,000 USD, all on corporate cards. The savings came to over a thousand dollars a month.
“It was one of my first clients and one of the biggest ones I worked with for many years,” he noted.
The relationship was built on a specific, demonstrable number and held because the service matched the promise. That dynamic then became the template.
Where the big names don’t go
The payments landscape today is dominated by names most merchants recognize: Stripe, Square, PayPal. But those platforms are payment facilitators (PayFacs), operating under a fundamentally different license structure than BAMS, which is a registered Independent Sales Organization.
And more importantly, they were built for a different kind of consumer.
As Stripe itself explains, PayFacs aggregate many businesses under one master merchant account, enabling fast onboarding with minimal friction; ideal for a new or micro-volume merchant who needs to start accepting payments quickly.
A teenager selling guitars from a garage can be approved in minutes, often with reserve holds, delayed funding, and no dedicated point of contact, for example. That accessibility is, by design, the whole point.
BAMS has no interest in that segment. “We do not play in the micro-merchant space at all,” Akhrin confessed.
“BAMS prefers to work with established businesses with lots of existing credit card revenue to be able to have intelligent conversations with business owners so they can optimize how much they pay – and to ensure they are working in the best environment possible.”
The focus, then, is on established businesses processing $15,000 USD or more per month – merchants large enough that optimization means something in real dollar terms.
Where payment facilitators typically fund accounts in two or three business days, BAMS offers same-day and next-day funding; where facilitators route support through generic channels, BAMS assigns dedicated account managers; and while platforms like Stripe push proprietary tooling, BAMS integrates with 95% of the terminals and software merchants already use.
What the statement reveals
When a merchant submits their processing costs for a BAMS review, the pattern is consistent enough to feel like a rule: the bigger name on the statement, the higher the margin being extracted.
According to industry data, smaller merchants – those processing under $1 million USD a year – are most often pushed toward flat or tiered pricing structures, with effective rates landing between 3.2% and 4.0% once all fees are included. Meanwhile larger merchants, with more negotiating leverage, frequently pay significantly less.
The difference isn’t risk – it’s information.
Bank-affiliated processors are the most reliable offenders. Banks, Akhrin is direct about this, are not payment processors but refer accounts to processors and layer a significant markup on top – a fact most business owners never learn because they assume their bank is acting on their interest.
“When BAMS sales representatives perform account reviews and see a statement of a bank, the team gets very excited because we almost always know that the savings will be significant.”
Reputation as infrastructure
The company holds a 4.9-star rating on Google and TrustPilot, and an A+ with the Better Business Bureau, Akhrin shared. In payment processing particularly, where F ratings are common enough to be industry background noise, that combination reflects a deliberate operational choice.
Part of how it gets maintained is through the kind of problem-solving that doesn’t show up in pitch decks. BAMS has, more than once, scrambled to get a merchant live by the morning, working nights, weekends, showing up on-site, because a business owner waited until the last possible moment before opening day.
“The gratitude our clients expressed as a result continues to fuel our team to go above and beyond, twenty years in.”
A trend to undo
There is one development in the industry Akhrin would reverse if he could: the spread of customer-facing surcharges at the point of sale. The 3% “service fee” now appearing on receipts across the U.S. is, in his view, a mistake dressed up as a solution.
“There are currently too many loop holes for businesses to be able to surcharge their customers at the point of sale. The new fad of charging customers a “service fee” of 3% or more has become commonplace with many businesses and it is creating a very negative experience for customers, which cannibalizes them coming back to certain locations that surcharge customers versus those that do not.”
A better alternative, he suggested, is for businesses to raise their prices by 5% and “not nickel and dime their clients with additional surcharge line items.”
The data supports Akhrin’s concern. A 2025 study found that 34% of small businesses are now adding credit card surcharges, and that satisfaction with processing costs among businesses that do so is 24 points lower than among those that don’t.
Separately, J.D. Powers’ 2025 Credit Card Satisfaction Study found that customer satisfaction scores fall 39 points on average when a cardholder encounters a surcharge, and 81% of those who have experienced one have used an alternate payment method specifically to avoid it.
And an independent review commissioned by Weave concluded that 71% of small business customers actively avoid businesses that charge card fees altogether.
What comes next
BAMS has a payment gateway the founder describes as comparable to Stripe’s in core functionality, cheaper to use, and currently underutilized simply because it’s less well-known. It is already enabled for AI agent interactions, thus positioning it to facilitate purchases within automated workflows as that infrastructure matures across the broader market.
The next few years, in Akhrin’s telling, are about growth that is intentional rather than aggressive: 10% year-over-year increases in new processing volume, deeper gateway adoption, and a team that continues to grow in the ways that compound – earnings, stability, the kind of professional foundation that shows up in people’s lives outside of work.
“More weddings and more families as a result of the support and investment that they receive from BAMS,” he said.
Twenty years after setting up appointments in Brooklyn, the business Akhrin built is still doing a version of the same thing: finding merchants who have been overpaying, showing them a number, and asking whether they’d like to do something about it.
The technology got more sophisticated. The question didn’t need to.
