How Should We Price Our Treasury Management Services

It’s a question we are asked so often: How should you price your Treasury Management Services? While looking forward to replacing revenue from credit products with non-interest income, let us provide a few key factors to consider.

Let’s start with the most essential pricing questions:

Do we charge for this?

Some services are worth their weight to protect assets, such as ACH Debit Block, which may save you in the long run.

What are the price points?

Multiple price points for complex services may make sense, but to some customers, the perception of nickel-and-diming them may be at the forefront.

How much do we charge?

Do we price below market, at market, or above? All three may be good

answers depending on your market demographics.

Economic considerations:

ACH Entries have lower per-item base fees (under $0.003), while Instant Payments’ base cost is about $0.045 per entry. This makes them more attractive to low-volume users but less so to high-volume originators such as utilities, memberships/subscriptions, or charitable giving.

Other Key Considerations

Client Segmentation

• Business Size: Larger clients may receive volume discounts or custom pricing.
• Industry: Different industries have unique needs and risk profiles; higher risk may mean higher pricing.

Cost of Service Delivery

• Operational Costs: Cover technology, personnel, and infrastructure.
• Technology & Compliance: Reflect investments in platforms, regulatory compliance, and cybersecurity.

Market Competitiveness

• Competitor Pricing: Stay competitive while emphasizing your value.
• Market Positioning: Decide if you’re a premium, value, or mid-market provider.
• Bundling: Offer service bundles, especially for small businesses.

Usage Patterns

• Transaction Volume: Higher usage may mean lower per-transaction costs.
• Frequency & Scalability: Regular users may get discounts; pricing should scale with business growth.

Risk Management

• Risk-Based Pricing: Higher-risk clients may pay more for risk-intensive services.

Customer Retention & Acquisition

• Promotions: Use introductory offers to attract new clients.
• Loyalty Discounts: Reward long-term customers.
• Cross-Selling: Price cash management services to encourage uptake of other products.

Economic Environment

• Interest Rates: Adjust for the impact of prevailing rates on service profitability.

Service Differentiation

• Unique Value: Premium pricing for differentiated or high-reputation services.

Let Us Help

Getting it right is not a matter of guesswork. A thoughtful pricing strategy balances your institution’s goals with client needs, ensuring competitiveness, profitability, and long-term relationships.

When in doubt, call in an expert. Wespay Advisors is here to help devise a successful strategy benefiting you and your clients.

John Curtis, AAP, APRP, NCP

SVP, Business Consulting Leader
415-373-1190
[email protected]