Aloha and NCR Merchant Fees Just Increased

Could there be a better coincidence?

As NCR appointed Jeff Sloan, the King of Fake Fees, to its board, NCR decided to levy one of the largest fee increases we’ve ever seen.

aloha fee increase

In this notice NCR is effectively telling merchants that, if they want their payouts more than once a month (because what SMB doesn’t have cash flow problems?) then it’s going to cost the merchant 25 bps and 7 cents a transaction.

Using Toast merchants as an analogue, we’d bet the average NCR restaurant has a $30 average check.

That 7 cents would imply another 23 bps.

25 bps + 23 bps means…

NCR is raising rates 48 basis points.

Remember, the average NCR restaurant merchant is probably doing $1M in annual GPV (gross processing volume).

A fair payments margin would be ~20 bps.

This is huge fee increase.

Now, NCR was probably cooking up the fee increase prior to Jeff Sloan joining the board, but man if this isn’t the most coincidental timing event in history.

Could imagine it folding out like this:

Present me the anus of every one of your merchants.

Never again shall they have a solid bowel movement.

May I live forever under the creed of the Payments Bro.

No telling how widespread the fee increase will be, because unless the payments company is absolutely tanking they roll these fee increases out in cohorts for a few reasons.

1. They want to measure how many merchant leave after eating the fee. Usually the math there is that yes, some merchants will leave, but the payment company will more than make up for that voluntary churn with the margins they’re making on the merchants who stay
2. They don’t want to blow results out of the water if they’re a public company (which NCR is). You need a slow and more methodical rate of increases because there’s a limit to how much pain a merchant can take before it becomes insolvent. Payment bros absolutely live to ride as close to that line as possible: if the merchant makes a profit, that’s bad, but if the merchant goes under, that’s also bad

We wonder how many more NCR merchants just up and leave for a competitor.

Yes, NCR has divested JetPay (we heard to Global Payments).

Yes, NCR had to spin up a new payments business.

Yes, is reworking their entire business model to underwrite hardware and software with payments (we guess better 16-years late than never?).

But man, this is still a huge fee increase to cover what are mostly considered costs of doing business.

If NCR is working to reinvigorate the SMB channel, this type of maneuvering is going to concern the shit out of potential sales partners (see how Global/Heartland shredded all trust from their sales partners as a reference).

You can complain about Toast all day, but their solution is ~20 years more modern than the systems sold at NCR.

NCR is has publicly announced that they’re investing aggressively to change that, but how far away they are from releasing anything marketable is up in the air.

So if you’re going to shit your pants every time you sneeze, you may as well have modern software.

(BTW, we don’t believe anyone should have to wear Depends as a byproduct of choosing the wrong software provider, and there will be some pretty intriguing announcements on workarounds coming soon).

NCR might contend that this is their first major increase in a long time, as this is often the pandering made by payment companies:

Oh we never increase fees but we had to because our costs keep going up

… as if payments isn’t perfectly hedged to inflation by virtue of being a flat percentage of the cost of the underlying good.

But we caught NCR increasing rates 6 months ago.

SO EXCITED TO HAVE JEFF SLOAN BACK IN THE GAME.

Can’t wait to see what he’ll approve next!

Thanks to Payment Authorities for the tip.

Another Look

Based on the notice we provided, NCR is indeed increasing merchant rates effective April 1, 2025, and this applies broadly to their payment processing customers, which includes users of Aloha POS systems.

Key Points from the Notice

• Discount Fee Increase: If your processing agreement was approved prior to April 1, 2024, your Discount Fee will increase by 0.25% (25 basis points) starting April 1, 2025.

• Authorization Fee: All settlement fee billing will move to assess on authorization attempts, and the authorization fee may increase up to $0.07 per transaction.

• Monthly Minimum Fee: Accounts that are inactive or process minimal transactions may see a monthly minimum fee increase to $75.

• Monthly Discount Rate Billing: If you elect to have your discount rate billed at month-end, there is an associated fee. Beginning April 1, 2025, customers choosing monthly discount billing will see a fee of either the rate stated in their agreement or 0.05% (5 basis points).

Does This Apply to Aloha?

• Aloha POS is an NCR product and uses NCR payment processing for many of its customers6. There is no indication in the release notes or public NCR documentation that Aloha users are exempt from these changes.

• The language in the notice is general and targets all NCR payment processing customers, not excluding any specific POS platforms such as Aloha.

• Industry analysis notes that NCR has a history of fee increases across its platforms, including Aloha4.

Summary Table

Conclusion

Yes, this increase affects Aloha users as well, provided they use NCR for payment processing. The notice is a clear rate increase, impacting both transaction fees and minimum monthly charges for many small and medium businesses using NCR products, including Aloha146.

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