I've noticed that some (most) companies make a surcharge when one pays a bill via CC. Often 3% if my memory is playing ball.
Does anyone know the true cost to those companies please?
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Much less.
Costco offer a card handling service - you pay a monthly charge upwards of a tenner and then pay a charge per transaction of 0.685%
You can bet the bigger boys are paying less
www.netpay.co.uk/costco
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Credit card fees for retailers are negotiable. If I remember correctly they will usually be between 0.6% and 1.8% depending on the services being agreed.
The retailer is also renting the equipment (card readers etc). There is typically a monthly admin fee as well, though that's not particularly high.
Mind you, it may have changed in the last 5 years or so.
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As Mark says the fee is negotiable depending on turnover and credit status of the merchant.
If you are first starting off taking CC payments it can be as high as 2.5%.
It's one of those real rip offs where if you have fraud on the card, in most cases the merchant carries the can, not the card provider.
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We take card payments in my wife's business, we pay on average about 1.2% for all card transactions, credit and debit, plus £18 per month for the machine. The card payments are in the bank within three to four working days, all quite painless.
Last edited by: Cheddar on Thu 30 Mar 17 at 11:20
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Do you have any estimate of the proportion of business you wouldn't get if you didn't take cards C?
We go, as visitors, to a number of model and collectors fairs and it's interesting to see the variety of stalls that do or don't offer card payments, I often wonder what proportion of business you lose by not offering card payments or gain by offering the facility.
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>> Do you have any estimate of the proportion of business you wouldn't get if you
>> didn't take cards C?
>>
Difficult to say how many customers would go elsewhere if they had to pay cash or cheque, though about 85% of the business is card.
The other factor is that it costs to pay in cash and cheques which offsets the cost of taking cards.
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"Easy" is the Chilean equivalent of B&Q. It has the Chilean equivalent of a burger van in the car park. And a "completo", which is essentially a hot dog with lots of stuff in, is about £1.00.
And they take credit cards! I find that very surprising. But I guess it must be worth their while.
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i regularly volunteer in a wildlife reserve shop selling gifts and refreshments. I would say aorund 60% of sales are now by card. Contactless is becoming really big. I don't think you could realisticaly function as a retailer without card payment.
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>> Contactless is becoming really big. I don't
>> think you could realisticaly function as a retailer without card payment.
Im a bit like the queen now, dont carry cash.
Used my last cheque 9 months ago, the bank never sent me another book, not missed it.
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Dont use a lot of cash either these days but can't quite manage without any. There are still quite a few places that are cash only like the greengrocer on the market or the barber. Not used a cheque for ages either. Bank transfer is so much more efficient.
Last edited by: CGNorwich on Thu 30 Mar 17 at 13:07
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>>Mind you, it may have changed in the last 5 years or so.
0.6% I would say was a bit low - 0.8% maybe. That has now reduced. The big change has been to the interchange rate.
There are two bits to the merchant fee, the "interchange" part which goes to Mastercard or Visa for example, and the fee that goes to the "acquirer" providing the service to the retailer - Worldpay/Streamline, Barclays Merchant Services, Global Payments, or whomever. For a large retailer, the acquirer fee would be a very small addition to the interchange fee.
Up to 2015, large retailers would typically have been paying less than 1%, almost all of which would be the interchange fee of c. 0.8% (it varies a bit by card type e.g. corporate/premium/standard/charge or whatever, excluding debit cards which are cheaper to accept as they have a flat transaction charge of a few pence rather than an ad valorem fee)*.
In 2015, the 0.8% interchange element was reduced by an EU cap to 0.3% (something good the EU did).
Basically, the market was uncompetitive. Most of the interchange fees actually go back from the networks to the card issuers. They use these to fund the interest free period and to provide other cardholder benefits. The issuers (mainly banks) have historically owned the networks between them so it was in their interests to have higher rather then lower interchange, as they could offer better benefits to cardholders, recruit more of them, and/or just pocket more profit (I simplify).
*this is why car dealers don't mind you paying by debit card but will charge you for a credit card..
Last edited by: Manatee on Thu 30 Mar 17 at 13:46
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P.S.
I had forgotten some more recent changes to debit card charges in the above. That looks very muchh like the banks (the main beneficiaries of interchange) trying to balance the books after the capping of credit card interchange.
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>>>*this is why car dealers don't mind you paying by debit card but will charge you for a credit >>>card..
Most recent purchase in mid 2016 the dealer was prepared to take the whole amount £11.5k on a credit card. Surprised me, and I already had a cash discount of 37+% and no trade in!
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>> I've noticed that some (most) companies make a surcharge when one pays a bill via
>> CC. Often 3% if my memory is playing ball.
>>
EU rules came into force in December 2015 limiting the charges that banks can impose on retailers for dealing with card payments.
>> Does anyone know the true cost to those companies please?
>>
May not be current, but here goes:
www.cardswitcher.co.uk/2016/05/uk-card-processing-fees-change-2016-2/
www.telegraph.co.uk/money/consumer-affairs/why-are-airlines-still-charging-us-to-pay-by-credit-card/
www.telegraph.co.uk/personal-banking/credit-cards/eu-ban-on-creditcard-fees-backfires--youll-still-pay25pc-to-spen/
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>> >> I've noticed that some (most) companies make a surcharge when one pays a bill
>> via
>> >> CC. Often 3% if my memory is playing ball.
>> >>
>> EU rules came into force in December 2015 limiting the charges that banks can impose
>> on retailers for dealing with card payments.
Another one of those useless EU regulations, that will soon be gone. Remember, its a price worth paying.
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I have a Halifax Clarity credit card, which paid a bonus of £5 a billing month if you spent £300 in the said month.
I'm pleased to report that I've managed to get that fiver every month for which I've had the card, making sure I settled the balance, by paying off as I spent on it.
I'm not pleased to say that this bonus has ceased from March 2017 and a couple of days ago I had the last fiver credited to the card account.
I used the card today, for that purpose, for the last time, (in ALDI) reducing my spend there by an effective five quid.
The Halifax Reward current account bung has gone down from £5 per month to £3 per month, too :-(
Now - I also have an M & S Credit card which gives points towards M & S vouchers if used.
So - that's the next target - seeing if the points make it worth the time spent electronically transferring sums from my current account to settle up spends on that card.
Tight - yes. Summat for nowt - YES!
Last edited by: Roger. on Wed 29 Mar 17 at 22:55
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Roger, the benefits are reducing for all the card perks. Tesco cut the points on my credit card from 1 for every two pounds to 1 for eight. Not worth bothering with now.
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We have both Tesco and Morrisons points cards. I never use mine although I buy our motoring essence at M's 'cos its 200 yds away.
I did check Tesco's points catalogue a year or so ago and found that a plastic credit card holder would take me about 75 years to save for. Just can't be arrassed now.
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I have had a John Lewis card for years and use it for almost everything.
It generated JL voucher(s), these days a gift card and it is spent in Waitrose .
When still at work I hammered Barclay card but ,first they changed to trendy reward items and then company insisted we use a almost useless Diners card.
Cash for small traders who want a minimum spend.
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It might only be a minor thread byway, rather than a full diversion, but, as mentioned in another thread, the local Council unilaterally removed the cash machines at the local carparks, and now force you to use Ringo. This means using a phone and your credit/debit card, registered with Ringo.
Part of that transaction is an extra and unavoidable 10p "convenience fee". Being the sort of person irritated by triviality, I spent some time trying to find out the legality or otherwise of such a thing, but got bogged down quite fast.
But I think it boiled down to "no, they are not allowed to do that and make any kind of profit, and even if they argue it's cost neutral they are not allowed to do it all in a carpark anyway. The arbiter is Trading Standards, but no Council Trading Standards Department is likely to take their colleagues to task (or court) over it, and virtually all councils do it, tough".
You also of course have to pay for the phonecall, or data if you possess a smartphone and use the app
You also have to be sure to remove the default settings on the new account, or you get charged a further 10p each time you park as they send you a text to confirm your booking. And another when the time comes to an end.
So, at worst, what was 70p for 20 minutes last week can now be 70p+10p fee (+10p start text+10p end text), so £1.
30% increase overnight with no choice about it. The signs, of course, still say 70p for 20 minutes.
Fees. Pah.
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42.9% increase Crankcase I fear!
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If I review a cafe or coffee shop on Google Maps I'll knock off a star for not accepting card payments (contactless or otherwise). Not difficult, not expensive, and infinitely easier than having to manage large amounts of cash.
Don't think I've paid cash for anything for months.
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Use cash quite a bit, a few of the local shops don't have card machines and the some have a minimum charge of £10. So having cash in the wallet is always handy. The local greengrocer doesn't take cards, infact first time i asked if they did the owner looked at me oddly 'oh no we don't do cards' as though it were some strange idea, you can pay by cheque she said cheerily. Mind you i still use them a fair bit, paying for various bits and bobs.
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>> Tesco cut the points on my credit card from 1 for every two pounds to 1 for eight.
I think you'll find it used to be for every £4 spent.
The points reduction only applies to non Tesco purchases though. You still get a point for every £1 of fuel bought. Same applies to any purchase in store or on-line.
secure.tesco.com/clubcard/collect-points/
www.tescobank.com/credit-cards/rewards/
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I think you only get 1 point for every £2 of fuel.
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With a Clubcard yes, but not a Tesco Credit Card.
See table toward bottom of page
www.tescobank.com/current-accounts/rewards/
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>> >> Tesco cut the points on my credit card from 1 for every two pounds
>> to 1 for eight.
>>
>> I think you'll find it used to be for every £4 spent.
I was one of the Tesco World card customers so they honoured the 1 point for £2 on my account for years after they stopped offering it
www.moneysavingexpert.com/news/cards/2015/09/tesco-to-slash-rewards-points-for-28m-credit-card-users
Never really shopped that much in the stores and petrol stations just because there isnt one close enough so most of my points came from the credit card. I used to regularly clock up over £120 a year in clubcard vouchers.
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>> I used to regularly clock up over £120 a year in clubcard vouchers.
What really is annoying is that Tesco no longer operate the double points system where £120 in vouchers could become £240. I've bought loads of products over the years simply by doubling up the vouchers. I don't even get any food discount vouchers anymore either.
My sister regularly gets £4 and £5 off vouchers (if you spend more than £40) through the post from Tesco. She rarely shops there, so they try an entice her back in with these vouchers. She just passes them onto us instead and we give her any Sainsbury's ones we get. Sainsbury's are a bit more strict on it though, so she uses my Nectar card too so the account numbers match up.
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>> Another one of those useless EU regulations, that will soon be gone. Remember, its a
>> price worth paying.
>>
How much has it saved you since it came in to force in December 2015?
It has had "Zero" effect on my expenditure/savings. The few merchants to whom I paid a surcharge are imposing the exact same surcharge as they did before the EU bureaucrats decided this was a deserving cause on which to expend their valuable time.
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You're missing the point.
If a retailer pays 1% on half of its sales that are on credit cards, that 0.5% of sales is paid by everybody.
If the charges fall then so do average prices over time unless retailer margins increase - but there's no reason why they should, other things being equal, in a competitive market.
The EU action was aimed at benefitting consumers.
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>> If a retailer pays 1% on half of its sales that are on credit cards,
>> that 0.5% of sales is paid by everybody.
>>
That does not make any kind of accounting sense. The retailer has chosen to make less on some sales than others possible hoping that those who pay by card will spend more.
No part of card sales is paid for by anyone else.
If you and I both buy a new car and I get a discount and you do not does that mean that you have paid half my discount? The dealer has simply accepted less profit on my deal rather than get no profit because I have gone elsewhere to get a deal.
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>> If you and I both buy a new car and I get a discount and
>> you do not does that mean that you have paid half my discount? The dealer
>> has simply accepted less profit on my deal rather than get no profit because I
>> have gone elsewhere to get a deal.
Different type of sale. Car is low volume high value large margin item.
Coffee is low price low margin high volume
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>> Coffee is low price low margin high volume
>>
absolutely, does not change the accounting or the logic
I think more people will use my coffee shop if I accept card payments
I will accept that I make say, 5p, less profit from card sales, it is still a profit
Cash customers have not paid any extra
I still make a profit
The monthly rental of the card machine or whatever is a fixed cost
the transaction charge is a variable cost, directly on the card sales
The accounting logic is still the same cash customers are paying nothing towards my card costs
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All customers are paying towards all costs. If the profit is insufficient then prices will go up for everybody.
It is frequently too difficult, impractical, unwise or illegal to target just the "problem" customers.
So I guess​ it's fair to say all customers share the burden, but to say one pays for some of the other's discount isn't really accurate.
Last edited by: No FM2R on Fri 31 Mar 17 at 11:37
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None the less, there are still plenty of places that wont take card payments under a certain value. I have to assume they know their profit profile.
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I'll tell you what you haven't got CD. PUNK TU ASIAN.. Get some full stops.............:-)
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Save up and only spend what you can afford.
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>> Save up and only spend what you can afford.
>>
Unfortunately doing that would slow the economy, which is built on credit.
Companies borrow to invest. People borrow to buy and furnish homes, to provide transport to get to work etc.
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The Germans borrow.
I spent 4 years visiting Germany setting up schemes in Dusseldorf and Essen (for companies all over Germany) to borrow from UK banks.
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Hello Wibble. Been here before? If not welcome ! If so, welcome back !
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>> If a retailer pays 1% on half of its sales that are on credit cards,
>> that 0.5% of sales is paid by everybody.
How does it cost to handle cash? To make trips to the bank? For mistakes? For theft? For hassle?
Well worth 0.5%, especially considering contactless transactions generally faster than cash.
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In my retail experience, cash handling became very expensive. I cannot remember exact figures, but the banks charged for paying in cash. For many years we tried to pay every supplier in cash. By so doing we mitigated the risks of being robbed either at or en route to a night safe, and keeping cash either at home or on the premises in a safe had an element of risk.
We had a few large wholesale suppliers who delivered and they had onboard safes on the vehicle. Cash payments ceased when it was realised they could become targeted... they would often be carrying ten figure cash sums at overnight halts, and understandably the drivers were not happy about that, nor the insurers.
We promoted 'Cash back' with card payments, and being part of a trade body our card machine costs were reasonably low. There was no minimum charge, but any card transaction below £5 was not encouraged.
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>> Well worth 0.5%, especially considering contactless transactions generally faster than cash.
Probably, yes, but the point was that roughly 5/8 of the 0.8% interchange was paying not for the transaction processing but for the card users' interest free periods.
And debit cards are still much cheaper to accept than either cash or credit cards.
I like contactless, especially using my phone which is usually to hand.
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I believe that in some American states, adding card fees is illegal.
IIRC, eBay is located in one of these, California, and I had arguments with eBay UK , when their global standards implemented that law for us in GB.
"Not in the UK", I said, and eventually got them to agree.
Probably different now, though, as they stuff Paypal down a seller's throat, willy-nilly.
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I use Android pay whenever I can. I would not buy a phone lacking NFC.
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I often pay in cash for things like cinema tickets, the one nearest us adds on a 'handling fee' if you pay by card. I think that's fairly common for ticket purchases.
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Bought 500 litres of 'eating oil this week (£209) phone order, was told there'd be a charge for paying by credit card, so I coughed up with my debit card = no problemo with that at all at all.
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It can be worth paying a small credit card fee for the benefits that a credit card gives under section 75 of the Consumer Credit Act for purchases between £100 and £30,000.
Also, you don't need to put the whole purchase on the card, £1 will do it.
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Smile still do a cash back on their CCs. One of the reasons they're about to go under maybe.
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>>It can be worth paying a small credit card fee for the benefits that a credit card gives under section 75 of the Consumer Credit Act for purchases between £100 and £30,000
Noted, and taken 'on board'.
www.which.co.uk/consumer-rights/regulation/section-75-of-the-consumer-credit-act
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>>Germany
Forgot to add that they are huge users of Private Finance Initiative schemes because they don't go on the balance as a liability in the same way that a term loan does.
Last edited by: Wibble on Sun 2 Apr 17 at 14:00
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>> Forgot to add that they are huge users of Private Finance Initiative schemes because they
>> don't go on the balance as a liability in the same way that a term
>> loan does.
Unbelievable that public finance borrowing limits could be avoided this way and overall costs to taxpayers increased, but true. Step forward the Conservatives who invented it and Labour who went completely out of control with it.
If proof were ever needed that politics is institutionalised lying then PFI is it.
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>>PFI
Along with subcontracting services like waste collection or collection of council taxes. I cant believe that it is really cheaper than councils employing staff and doing it themselves. All it does it reduce head count for the council but the same amount of people need to be employed to do the job, plus the local subcontracting manager.
Our local hospital on subcontracted maintenance was charged £250 to change a bulb in a light fitting. The bulb cost £5 and the contractor was there for 15 minutes!
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>> >>PFI
>>
>> Along with subcontracting services like waste collection or collection of council taxes. I cant believe
>> that it is really cheaper than councils employing staff and doing it themselves. All it
>> does it reduce head count for the council but the same amount of people need
>> to be employed to do the job, plus the local subcontracting manager.
That's just outsourcing rather than PFI.
>>
>> Our local hospital on subcontracted maintenance was charged £250 to change a bulb in a
>> light fitting. The bulb cost £5 and the contractor was there for 15 minutes!
That is just a carp contract. Nobody would have signed an agreement to pay £250 to change a light bulb, but somebody signed one that allowed the contractor to do it.
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Paying by Credit Card - mikeyb
