by Matt Rej
Value-added services (VAS) are the fastest-growing fees in the payment processing industry right now. And for a lot of merchants, they’re starting to show up on statements without anyone noticing.
Card networks and major processors alike have all told investors that VAS is where their growth is coming from. In some cases, VAS is starting to look just as big a business as basic credit card processing itself.
Visa’s VAS revenue grew a whopping 28% last quarter. Mastercard’s grew 22%, and Clover’s VAS revenue is up 18% (which is now over one-fourth of Clover’s total revenue).
These aren’t small numbers, and this isn’t a coincidence.
This is a really big deal for merchants. Because when VAS becomes a primary growth lever for the companies you’re paying every month, it’s only a matter of time before even more of these costs end up on your statement.
What Are Value-Added Services?
Value-added services are anything that a card network or processor sells on top of basic payment processing. This category is intentionally broad, and can include anything like:
- Fraud tools
- Tokenization
- Data analytics
- Loyalty programs
- Consulting
- Gateway services
- Software add-ons
- Reporting dashboards
- Account updater services
Dozens of other products fall into this bucket, too. So you can clearly see how wide a variety you’ll find across different value-added services.
How VAS Has Become a Catch-All Term in Payment Processing
The term “VAS” itself is older than most people realize. But the way it’s being used today is relatively new.
For a while, VAS was always a quiet side category. Networks and processors made most of their money on transaction-based revenue, and the extra services were either bundled into pricing or sold as optional add-ons.
That’s changed.
Now VAS has become one of the most profitable parts of the entire payments industry, and the language around it has gotten broader along the way.
Basically anything that a processor wants to charge outside of basic transaction processing can be labeled as VAS. That’s what makes this so confusing for merchants.
The label covers things that are obviously useful (like tokenization or chargeback management), things that are helpful for some businesses but not others (like loyalty programs or premium reporting), and other stuff that are essentially just junk fees dressed up with better-sounding marketing language.
All of these live under the same umbrella. But your statement doesn’t tell you which is which.
Where VAS Fees Come From: Two Layers Behind Your Statement
Every value-added service on your merchant statement can be traced back to one of two places:
- Card networks
- Payment processors
The reason each layer matters is because VAS is now part of the business that’s growing fastest for both of these entity types.
Basic payment processing, while still profitable, is a mature business model. Transaction volume is growing in single digits while VAS is growing in the high teens and twenties. Which is why every earnings call this year has talked about it.
Card Network Layer
Visa, Mastercard, and the other networks sell VAS primarily to banks (issuers) and processors (acquirers). But they also sell some VAS directly to merchants. Either way, when the networks raise prices on these services, those costs typically get passed to merchants.
Processors refuse to absorb those costs internally, so they create new line items or new pricing structures to not only pass through the original costs, but also include markup so they can profit on top of the networks.
Processor Layer
Your payment processor also has its own category of VAS in addition to whatever it pays the card networks for. This is where most of the action is for the average merchant.
This can be anything from a customer loyalty program to an inventory management add-on, marketing tools, and monthly subscription fees for software bundles. It’s all VAS.
It’s a huge win for processors when they get you to purchase these because it further entrenches you into their system. While we don’t recommend switching processors regardless, the fact that you can end up getting five or critical business tools from the same provider that handles your credit card processing gives them a ton of leverage on your total costs.
VAS is Now One of the Most Profitable Components of Payments
If you’ve been reading our recent coverage on Visa and Mastercard’s latest earnings and quarterly processor earnings roundups, VAS is the common component across all of these players at different parts of the payment ecosystem.
Executives on all of these earnings calls spend a significant time addressing VAS growth.
Mastercard explicitly said that 60% of its VAS revenue is “linked to the network,” meaning it scales as transaction volume scales. That’s a polite way of saying that as you process more, you pay for more services bundled around that processing.
The payment processors have gone even further with this concept.
Fiserv’s Clover VAS revenue is surging. Its revenue is up 18% and it now represents 27% of Clover’s total revenue (a pace faster than the growth of Clover itself). The Global Payments leadership echoed a similar sentiment. They explained to investors how the Worldpay acquisition has accelerated its cross-sell efforts on Genius. And Toast is now “exploring a pricing model” for its AI assistant.
When a public company tells investors that a category is a growth lever, that company is always going to find more ways to sell it. They’ll typically start with low-hanging fruit, which in this case is existing merchants who already trust the brand.
Before going further, I want to be upfront about something. Not all value-added services are bad. Some are genuinely useful, and a few of them are worth paying for. The problem is that value-added services have become a catch-all term that covers everything from legit fraud prevention to things you didn’t ask for and don’t actually need. The rest of this post will help you understand the difference.
Value-Added Services That Are Actually Worth It
Before diving into the bloat and junk fees, I want to be fair. There’s definitely a real category of VAS that benefits merchants, and you can justify paying for them.
Examples include:
- Tokenization services on card-not-present transactions for on-file payments or recurring billing.
- Legitimate fraud scoring tools for high-risk industries.
- Payment gateway capabilities you actually use (specific integrations, hosted pages, multi-currency processing, etc.).
- Account updater services for subscription businesses so cards aren’t declined when they expire.
- Chargeback representation helps to handle disputes and recover funds (if you get lots of illegitimate chargebacks or friendly fraud).
The commonality between these services that they all solve or address a problem that your business actually has. They’re not problems that someone invented out of thin air, just so they can sell you a solution.
VAS Fees That Typically Aren’t Worth Paying For
Then there’s everything else. These are the line items that tend to show up on statements without much explanation. They’re bundled into pricing in ways that are hard to compare or solve “problems” you don’t actually have.
Watch out for:
- Vague fees with generic names, commonly labeled as a service fee, support fee, analytics fee, or compliance fee.
- Loyalty programs you didn’t enroll in or don’t actively use.
- Marketing or “reputation management” services.
- Inventory or back-office software bundles you don’t use.
- Premium reporting or analytics dashboards that you’ve never logged into.
- Compliance and PCI fees that show up in multiple parts of your statement.
Every processor does this.
But where it gets tricky is when you’re auto-enrolled into certain services either without realizing it or not understanding there will be an added cost.
It’s also common for all-in-one POS systems and PayFacs often build software features in pricing that doesn’t match your actual needs. For example, you might be paying for a subscription tier that includes an expensive inventory module, but you currently track inventory separately on a spreadsheet or via a third-party tool (so there’s no need to pay extra here).
How to Audit Your Statement For VAS Fees You Don’t Need
When is the last time you actually looked closely at one of your merchant statements? I can practically guarantee that you’re paying VAS fees if you aren’t proactive with regular audits.
Fortunately, you can identify unnecessary VAS fees fairly easily. Just go through your statement line by line, and ask yourself the following three questions about every charge that isn’t obviously a transaction fee or interchange pass-through.
- Do I know what this is for? If you can’t explain what the fee is in one sentence, that’s a red flag.
- Am I actively using it? For fees that cover a service or tool, log in and check the usage. You can eliminate it if nobody in your company uses it.
- Did I agree to this in writing? Some VAS get added through pricing updates or auto-enrollments. If you don’t sign off on the cost, you can usually push back.
Once you’ve flagged suspected line items, call your processor.
Ask them what each fee is for, when it started, and what it takes to remove it. Lots of these should be able to come off your statement by asking. Others require some negotiation. And even a few of the non-negotiable ones can be offset by reductions somewhere else.
If you want to get this done faster, my team does this type of audit on every statement we review. We’ve seen merchants paying thousands of dollars per month in VAS they didn’t need or realize was on their bill.
What’s Coming Next
The VAS category is continuing to expand in the payments space. I expect this to trend upward for years.
Companies involved in processing transactions that are reporting record growth and profits due to VAS will continue to pull on that lever as long as they can. And the companies struggling or falling short of expectations will also use value-added services for new revenue streams.
So there’s really no hiding.
Plus, there are a bunch of new product lines in the pipeline that will eventually show up on merchant statements. Earnings calls have been previewing agentic commerce, AI-powered tools, stablecoin settlement services, and more. Each of these will come with a new fee structure attached.
You need to get ahead of this now. Start by getting unused or unnecessary VAS fees removed from your statement. This helps set the expectation with your processor that you’re paying attention.
Then continue to push back whenever new fees are introduced, even if there’s a “service” attached.
If you want a second set of eyes on what you’re currently paying, plus ongoing monitoring to ensure you’re not being charged extra for stuff, just contact me or my team for a free consultation. We’ll go through your statement, identify VAS you don’t need, and negotiate it off your account. No switching required.