MSE News: Credit and debit card charges banned from Saturday - what you need to know

[Deleted User]

That would still be a fee specifically for card payments, so not allowed.

Depending on how price sensitive your industry is, you may want to look at increasing prices across the board.

If card transactions are a small % of your business, you may want to just swallow the loss, though you might expect to see card usage increase as a result of the dropping of the fee.

Edit - unless you mean that the service fee will be applied to all transactions, not just cards, which would be ok.

molerat

ToonArmy wrote: »

As a small business which normally deals in cash and cheques, we have to pay 2.75% to our card provider to 'process the payment' this means we lose out by 2.75% in profit, (our profit margin is quite low 10-16%) we are now looking to introduce a service fee to cover the time of an employee to accept payment by card, as this is a service fee it is not covered by the new law?

Clearly still a fee for using card as payment

blaggrr

ToonArmy wrote: »

As a small business which normally deals in cash and cheques, we have to pay 2.75% to our card provider to 'process the payment' this means we lose out by 2.75% in profit, (our profit margin is quite low 10-16%) we are now looking to introduce a service fee to cover the time of an employee to accept payment by card, as this is a service fee it is not covered by the new law?

Yes, I appreciate it can be hard on small businesses until a new equilibrium develops.

Meanwhile elsewhere in the EU, I noticed what looked like a new card payment fee warning notice at the till of a large EU supermarket this week - no fee for any debit card including foreign debit cards, but a fee for ALL credit cards. So I used a UK debit card and was charged no fee. They seemed to be still discriminating between debit and credit cards at least.
Edit: same supermarket two days later this week had new signs at the till saying no fee for any cards but no cashback on credit cards - and this time I paid using UK credit card with no fee.

Then at a large EU department store, I got 70% off original price in a Final Sale, showed a UK drivers license and received "10% tourist discount" off the subtotal (a further 7% off the original), then used a UK credit card, and was charged no fee. Hows that for enlightened EU merchant behaviour in a tourist spot? :rotfl:

eskbanker

ToonArmy wrote: »

As a small business which normally deals in cash and cheques, we have to pay 2.75% to our card provider to 'process the payment' this means we lose out by 2.75% in profit, (our profit margin is quite low 10-16%) we are now looking to introduce a service fee to cover the time of an employee to accept payment by card, as this is a service fee it is not covered by the new law?

As others have pointed out, you essentially have a choice of raising prices across the board or accepting a lower margin on sales paid by card, but should you go down the latter route, you may wish to consider the flip side that customers paying by card may have gone elsewhere had they not been able to, i.e. a lower margin sale is still likely to be better than no sale at all!

Nick_C

ToonArmy wrote: »

As a small business which normally deals in cash and cheques, we have to pay 2.75% to our card provider to 'process the payment' this means we lose out by 2.75% in profit, (our profit margin is quite low 10-16%) we are now looking to introduce a service fee to cover the time of an employee to accept payment by card, as this is a service fee it is not covered by the new law?

This seems quite high. Have you arranged payment processing directly with your bank? Have you looked at alternatives? For example, using facilities offered by the Federation of Small Businesses, or a Trade Association?

Or you could stop taking credit cards. You will lose some business, but you will lose even more if you try to introduce some sort of scam to get around the new regulations.

Most banks also charge businesses for depositing cash and cheques, so its unlikely you are losing 2.75%.

cidney

I don't have a debit card as I don't have a bank account. I don't earn enough apparently to open one. My pitiful monthly earnings are paid into my savings account and I then pay by credit card settling in full at the end of each month. I have had to do this for the past 5 years and keep all my receipts and have never paid out more than I earn. I am looking into bank accounts again in case they have changed the amount you can pay in. You never know. I am separated but still live jointly so my joint bank account went. This change will help me as I have to budget for credit card charges

eDicky

cidney wrote: »

I don't have a debit card as I don't have a bank account. I don't earn enough apparently to open one.

These days there should be nothing (apart from a record for fraud) to prevent you from getting a basic bank account with debit card:

https://www.moneysavingexpert.com/banking/basic-bank-accounts

Qhls

How does this apply to cash machines that charge to get cash out? And those companies that charge for cash back?

PeacefulWaters

Qhls wrote: »

How does this apply to cash machines that charge to get cash out? And those companies that charge for cash back?

It doesn't apply.

Neilmat

I placed a takeaway order to pay by cash and saw the surcharge so I included a note in the comments that said " As I am paying cash by accepting this order you agree not to levy the surcharge" and they didn't! Never forget the customer is King . Try it.