Transitioning from Shopify Payments to Lumino - A Compelling Case Study

Introduction

In the dynamic world of retail, managing transaction costs effectively can significantly impact profitability and operational efficiency. Many businesses grapple with high processing fees, delayed funding, and restrictive holds on their revenues. In this case study, we explore the journey of "Urban Bloom," a fictitious mid-sized online retailer specializing in home and garden products, as they transition from Shopify Payments to Lumino. The decision was driven by the need to find a more cost-effective and responsive payment processing solution.

Client Background

Urban Bloom had been thriving on the Shopify Advanced/Plus plan, processing an average of $643,262.92 across nearly 10,000 transactions monthly. Their diverse sales included payments via major credit cards like Visa, Mastercard, and Discover. As their business grew, the limitations of their existing payment processor began to hinder their cash flow, primarily due to high fees and delayed access to funds.

Analysis Overview

To determine the potential benefits of switching to Lumino, a detailed comparative analysis was conducted. This analysis reviewed total transaction volumes, individual transaction values, and the distribution across different card types. Key metrics assessed included the existing effective rate with Shopify, which stood at 3.13%, alongside total processing and passthrough fees.

Cost Savings Breakdown

Upon reviewing the comprehensive fee structure, it was evident that Urban Bloom could achieve substantial savings with Lumino. Under Shopify, their monthly fees amounted to $16,809.60, driven by processing fees of $5,991.94 and passthrough fees of $10,817.66. Annually, this summed up to an alarming $20,142.93 in total fees. Switching to Lumino, with its proposed effective rate of 2.61%, highlighted significant financial benefits:

- Monthly Savings: $3,333.33

- Annual Savings: $39,999.96

- Three-Year Savings: $119,999.88

These figures represent a direct decrease in the cost burden on Urban Bloom, making a compelling case for Lumino's cost efficiency.

Benefits of Switching to Lumino

The switch to Lumino brought several immediate advantages:

- Next-Day Funding: Unlike the previous delays, funds were now available the next business day, enhancing liquidity and enabling quicker reinvestment into the business.

- Reduced Processing Fees: Transitioning to Lumino cut the effective rate significantly, saving thousands of dollars annually.

- No Holds or Reserves: Lumino’s policies ensured that Urban Bloom had continuous and complete access to their funds, a critical factor for businesses managing large inventories.

These improvements directly addressed Urban Bloom's pain points around cash flow and operational efficiency, proving Lumino's commitment to supporting its clients’ growth.

Client Testimonial/Impact

The CFO of Urban Bloom shared their positive experience: "Switching to Lumino transformed our financial management. The next-day funding alone has allowed us to streamline our operations, manage our inventory more effectively, and plan for the future with greater confidence. We no longer worry about the unpredictability of cash flow, and the savings on processing fees have been a game-changer for our budgeting."

Conclusion

Urban Bloom's experience underscores the tangible benefits of choosing Lumino as a payment processing partner. The significant cost savings, enhanced access to funds, and the elimination of unnecessary fees illustrate Lumino's edge in a competitive market. For businesses looking to optimize their payment processes and financial health, Lumino offers a proven, transparent solution.

We encourage other merchants to explore how Lumino can tailor its payment solutions to their unique needs, just as we did for Urban Bloom. Contact us today for a personalized cost savings analysis and start transforming your business's financial landscape.