£5 Minimum Spend on Chip & Pin?

he6rt6gr6m

Understood. Thank you for the useful information.

Any idea where the 'charge' comes from, when the Govt. was pushing for people to use Chip & Pin over cash? Like, what does it pay for, etc.

LeeSouthEast

Nothing to do with the government. It pays for VISA/MasterCard to run the international network.

he6rt6gr6m

What, so the Govt. dont get 17.5% of that?

bitemebankers

LeeSouthEast wrote: »

Nothing to do with the government. It pays for VISA/MasterCard to run the international network.

Yes, that and the fees that go to the PDQ / merchant account provider.

xocbc

Well, in order to accept card payments, you need a card processor, which for example would be Streamline, part of RBS.

For the privaledge of being able to accept card payments, Streamline take a % cut of every transaction (for credit cards) or a fixed fee (debit cards). This is a charge for them processing payments, fraud protection and crediting your bank account with the balance.

On top of that, business bank accounts are not free, each debit or credit into the account attracts a small charge.

So for example, if Streamline take 50p for the use of a debit card, and then the bank takes 40p for the resulting bank credit, thats 90p for the card swipe.

Out of a £5 sale, 90p is a hefty %, and is likely to eat any margin the retailer has made.

Out of a £200 sale, 90p is insignificant.

bitemebankers

It's also worth noting that, all things being equal, the smaller the company, the higher the charges they'll be stiffed for by the banks.

somethingcorporate

cardinalbiggles wrote: »

They have to have it clearly visible at the point of sale.

That's not even remotely true. As the contract is not concluded until they accept your offer of payment until this point they can stipulate any conditions they please (verbally or otherwise) and similarly reject your offer of payment for any reason they see fit.

What you are saying is if the condition is not displayed you can force someone to sell it to you! You should have a look at invitation to treat and where the real power lies in the consumer / retailer relationship.

HTH.

davetrousers

he6rt6gr6m wrote: »

What, so the Govt. dont get 17.5% of that?

No, its something like 14.6%, I could work it out but can't be bothered!

blue_monkey_2

I think the 17.5% they are talking about is VAT. There is no VAT on merchant charges/card processing charges or bank charges.

If someone on my website pays me by card then it goes via Sagepay (used to be Protx) who charge me a minimum of £20 a month (there is VAT on this as it is called Gateway Services).

The money then goes into my Merchant Account - who then charge me a % or a fee for each card transaction. I did however manage to get away with the £20 a month minimum fee (whether I accepted a card or not).

Then the money goes into my Business Account - for which I am also charged fees.

I also pay £11 a month for my handheld chip & pin machine line rental (it's a mobile one) and an amount each time I use it (I am on the old rate, it is around £35 pm for a lot of people now), I also had to pay £700 for the machine when I bought it.

If someone pays me by cheque I am charged 76p for paying the cheque into my business account by my bank on top of the other bank account fees.

I also have to pay £110 a year for PCI compliancy for accepting card payment on a website. And I have to pay £80 a year for having a Security Seal on my website.

And small businesses get charged more, the more cards you process the better the rate you can negotiate.

Most retailers will have a note by the till to stop people buying things when they do not have money on them but there are lots of costs associated with accepting cards so I appreciate that retailers do not want a card when someone buys a Mars Bar or something. I am not sure how that new Barclays card will work they keep on advertising, I have had not literature at all on it and I have a Barclays Merchant Account. I cannot imagine any retailer would be happy for someone to be given a card for buying a 40p newspaper when the fees would cost around 30p for accepting a Debit Card.

Andy_L

he6rt6gr6m wrote: »

What, so the Govt. dont get 17.5% of that?

I don't think they do, AIUI financial services are VAT exempt. Thats why theres a "scam" going where, if you look at your receipt it may say "2.5% is payed to <a company thats obviously related to us> for processing this transaction. This does not affect the price you pay" As this is a financial service the company avoid VAT & can pocket the difference (only 17.5% of that 2.5% but, as they say, "every little helps")