MSE News: Banks slammed over plastic charges

Chris55_2

Surely the problem is that there is no free market for payment methods because the credit card processors insist that the prices should be the same for both. Like anything else a real price can only be established in a free market. Clearly there are benefits to using credit cards both for shops and consumers (as mentioned above). On the other hand if the business above offered 50p off for cash then we'd see either that 60p was a good price for the benefits of a card - or the prices might come down. Forcing shops to charge the same is just as wrong as adding mandatory insurance to the credit card bills.

Gordon_the_Moron

If they cap the fees for using debit/credit cards it will just mean worse deals for the card customers because they have to make their money from you not the retailer and the retailers will not pass on the savings.

Cypher1

Hi There,

Perhaps I can shed some light on the charges that are being talked about. We have a small business and as our turnover is of a certain amount the banks charge us the following, The hire of the card machine we use for transactions is £17.50 per month. On top of that because we don't do hundreds of thousands of card porcesses we are additonally charged 29 pence each time we process the card. Then on top of that when the money goes into our bank account they carge us another 29.9 pence for putting that money into our account, so thats 60p for each any EVERY transaction. Plus if the payment is by credit card then there is a 2.5% transaction charge on top of those fees. This is why we have to impose a £10 minimum transaction charge or we charge the customer 50p because often the profit margin on the goods we sell is significantly reduced by the bank charges.
We have tried all different banks and they all charge the same to within a fraction of a penny.

As for the cost of cash transactions, this will be in part reflected in the fact that when we pay cash into our business account the bank chage us 56p for every £100 deposited, now if you are a mainly cash generative business this mounts up very quickly.
i wish someone like Martin would take up the fight for small businesses on charges like this because we can't possibly compete with the big businesses who can negotiate charges with their banks and get costs down to a fraction of our fees. And finally YES if i didn't have such charges I would pass on the discount to my customers becasue cheaper prices means more sales.

I hope this helps with some insight into the costs.

Regards
Richard
North Devon

Snooze

You shouldn't paying them to pay in your own cash takings. My business is split over 2 business accounts - Yorkshire Bank for card payments and BACS payments and Abbey for cash payments and depositing cash takings. Yorkshire Bank isn't the cheapest for card transactions but their location is ultra convenient for where my business is and, like you say, there's only pence between them anyway. As for Abbey, their business account has no charges but you have to use the ATM machines to deposit your cash. Personally I hate using these because my money in 'in limbo' as such, but I break up the takings into smaller amounts and/or pay in more regularly instead of once per week.

Of course I could just use Abbey for it all, but there are far too many horror stories about Abbey in general and I don't like putting my eggs all in one basket. In fact I'm surprised I've got as long as I have with Abbey without any problems yet! :eek: <touches wooden things>

harryhound

Jon_B wrote: »

8.5p for a debit card transaction.

Just goes to show that some of the independents charging a £1+ just for using a card are making a profit of over 90% for card transactions. Like my local Chinese. It makes me want to stick chopsticks in their eyes.

That sounds cheap compared with Ryan Air!

zppp wrote: »

Not only that but the card processor has to insure retailers against card fraud, which costs also.

My experience if card fraud is that the banks almost welcome it - they simply do a charge back on the poor bl00dy merchant and slap a fee on top as well. They certainly don't mess up the crime figures by trying to catch the crook.
They also do tricks like "We asked the trader to call us back" when the transaction is a 10 GBP charge from an unmanned railway ticket machine.

That said, the card industry, must be losing millions to irresponsible can't pay won't pay types, cloning in parts of the world that refuse to institute chip and pin and retailers taking "deposits" and then going bankrupt; leaving the consumer to claim on the bank.

This is just a power play and the banks are sticking together to maintain their cartel on bank charges for payment systems.
Tesco might be able to push them around but just as the average farmer has to pay a fine for every customer complaint and finance this week's BOGOF, so the average small retailer has no leverage with the banks.

BTW - I would happily pay a pound a cheque to keep a preferably uncrossed cheque book.

Solomon_Broad

Jon_B wrote: »

Like my local Chinese. It makes me want to stick chopsticks in their eyes.

Vote with your dollars. If you keep shopping there and letting them get away with it, then they'll keep getting away with it, and nothing will change.

peter_the_piper

Cypher1 wrote: »

Hi There,

Perhaps I can shed some light on the charges that are being talked about. We have a small business and as our turnover is of a certain amount the banks charge us the following, The hire of the card machine we use for transactions is £17.50 per month. On top of that because we don't do hundreds of thousands of card porcesses we are additonally charged 29 pence each time we process the card. Then on top of that when the money goes into our bank account they carge us another 29.9 pence for putting that money into our account, so thats 60p for each any EVERY transaction. Plus if the payment is by credit card then there is a 2.5% transaction charge on top of those fees. This is why we have to impose a £10 minimum transaction charge or we charge the customer 50p because often the profit margin on the goods we sell is significantly reduced by the bank charges.
We have tried all different banks and they all charge the same to within a fraction of a penny.

As for the cost of cash transactions, this will be in part reflected in the fact that when we pay cash into our business account the bank chage us 56p for every £100 deposited, now if you are a mainly cash generative business this mounts up very quickly.
i wish someone like Martin would take up the fight for small businesses on charges like this because we can't possibly compete with the big businesses who can negotiate charges with their banks and get costs down to a fraction of our fees. And finally YES if i didn't have such charges I would pass on the discount to my customers becasue cheaper prices means more sales.

I hope this helps with some insight into the costs.

Regards
Richard
North Devon

Have you had the letter from Streamline etc where they are upping the charges? An additional 0.8% on credit cards and an extra 1p per debit card. Rather than reducing the fees as the mse reporter mentions they have actually gone up. (ps We use a building society for cash and cheques as there are no charges to put money in or take it out. We just use the bank for machine charges etc.

TFD_2

peter_the_piper wrote: »

Have you had the letter from Streamline etc where they are upping the charges? An additional 0.8% on credit cards and an extra 1p per debit card. Rather than reducing the fees as the mse reporter mentions they have actually gone up. (ps We use a building society for cash and cheques as there are no charges to put money in or take it out. We just use the bank for machine charges etc.

The letter from Streamline puts an additional percentage on certain "world cards" which puts them inline with business credit cards which already attract a higher rate. For most consumer credit cards, rates are unaffected.

peter_the_piper

I'll check this out when I get into work, could have misread the letter.