Torus highlights three overlooked realities about payments profitability, showing why transaction-level analytics is becoming essential for sustainable growth.
Torus was recognised in the “Data Insights” category at the FF Awards 2025—a signal of how sharply the industry focus is shifting toward profitability transparency.
We asked Kirill to share three often overlooked realities about payments profitability that many organisations are still grappling with.
Reality #1: Most payments businesses don’t actually know which transactions make them money
Ask a payments executive whether their business is profitable, and the answer is usually confident.
But when a business starts asking itself more precise questions—how much profit does each merchant or product actually generate? Are there profitability leaks? If so, where are they and how can they be stopped?—That confidence often fades.
In practice, profitability is still managed at the portfolio level. Averages, blended rates and quarterly reports are used as proxies for reality. That approach worked when margins were wide and cost structures were relatively static. It no longer does.
Scheme fees, processing costs and cross-border dynamics now vary transaction by transaction. Two payments with the same value can have radically different economics depending on card type, geography, routing and timing.
The uncomfortable part is this: many institutions are unknowingly cross-subsidising loss-making segments with profitable ones. Without granular visibility, those losses don’t look like problems—until margins start eroding faster than expected.
Reality #2: Blended pricing simplifies conversations—but hides structural problems
Blended pricing is often defended as a way to “keep things simple” for merchants and internal teams. In reality, it frequently delays uncomfortable decisions.
By averaging costs, blended models mask volatility in scheme fees and distort true unit economics. They make portfolios appear stable while quietly absorbing margin pressure beneath the surface.
In the UK market, in particular, we still see blended approaches used for risk smoothing. But as fee structures evolve and regulatory scrutiny increases, this smoothing becomes opacity—not efficiency.
Merchants are starting to push back. They ask why fees change, why margins fluctuate, and why explanations don’t match outcomes. When pricing models can’t be explained clearly, trust erodes—and commercial conversations become harder, not easier.
Blended pricing doesn’t remove complexity. It simply moves it to a less visible location.
(By the way, we recently looked at some of the most persistent myths around interchange fees — and how they distort profitability analysis.)
This growing gap between reported and actual profitability may be part of the reason data-driven approaches have been recognised by industry awards this year—not as innovation for its own sake, but as a response to a very real market problem.
Reality #3: Regulation is not the problem—lack of analytics is
It’s tempting to blame margin pressure on regulation. PSD3/PSR, increased expectations around fee disclosure, and broader scrutiny from auditors, boards and compliance teams do add pace and complexity.
Regulation isn’t the root cause; it’s a spotlight on existing operational gaps.
The underlying challenge is operational: many organisations still lack the analytical infrastructure to translate regulatory and commercial requirements into day-to-day insight—to explain fee drivers, trace margin movements, and attribute scheme and processing costs with confidence.
As a result, transparency becomes reactive reporting rather than active control. The teams that adapt fastest are not the ones facing “less regulation”, but the ones that can operationalise it through granular, transaction-level analytics.
What this means for the market
These truths are uncomfortable because they challenge long-standing assumptions about how payments businesses are run.
Profitability is no longer something you can review after the fact. It needs to be monitored continuously, at the transaction level, with the ability to trace costs and revenues back to concrete drivers.
Across the UK and Europe, we see a clear shift: analytics is moving from a reporting function to a control function. Institutions that adapt early gain more than just better margins—they gain confidence in decision-making.
Those that don’t risk flying blind in an environment where visibility is fast becoming a competitive requirement.
The uncomfortable reality is this: In today’s payments market, understanding unit economics is becoming a practical requirement rather than an afterthought.
