True charges to retailers of accepting credit/debit cards

w211

I think asking someone to pay an extra 6.5% to pay by card seems a bit much, but if it's a fixed amount (£3) then it may psychologically seem better value? Besides it will encourage people to pay in cash for smaller transaction amounts, though most of my work is corporate, and customers pay by a company so they're not really bothered about the extra cost. Debit cards are still the 6.5%. I still think its good value as it saves having to set up a merchant account, having to have a minimum transaction amount, hiring a chip & pin machine (though I also have that option), and having another merchant account for American Express (which I do need to accept as a lot of people who pay by company card may only have an American Express company card), plus a fixed monthly fee of some sort.

The card readers use GPRS, and comes with a SIM card (on the o2 network), so the monthly charge is the equivalent to a line rental.

NFH

w211 wrote: »

I think asking someone to pay an extra 6.5% to pay by card seems a bit much, but if it's a fixed amount (£3) then it may psychologically seem better value? Besides it will encourage people to pay in cash for smaller transaction amounts, though most of my work is corporate, and customers pay by a company so they're not really bothered about the extra cost.

I appreciate your reasons, but I'm not sure I agree entirely. When I use a service like yours as a business customer, I want to pay with my company Amex card and I re-invoice the whole amount (usually £50 to £100) back to the relevant client. I wouldn't care about the surcharge, and the client wouldn't care much either; the admin costs of cash are more than this. You shouldn't use your lower-paying customers to subsidise your higher-paying customers who are less price-sensitive. I think you'd please more of your customers with the percentage.

w211

Thanks, good points. Also considering the industry - taxi and private hire (minicab), most transactions are being done in cash (though lots of corporates and exec work have accounts and pay by card anyway), and although card payments are now becoming more common, I think it is still accepted that an extra charge is paid when using a card - some taxis/PH add as much as 10% to the cost fare, and they keep the rest (although different companies who handle your payments charge different rates).

For me, there aren't any admin costs of cash - it's not usually banked anyway as only one company I sub-contract for has (little) cash work - unless I have a rare long distance job to Birmingham or Manchester - and they pay in cash. I put the cash aside to pay my insurance and income tax - and the car wash!

I think maybe I'll just quote a price assuming they pay'll by card anyway - most do anyway.