Before the pandemic, more than half of all payments were made by card in the UK. Now that number has increased with consumers turning away from cash in favour of credit and debit cards and payment apps. Small businesses want a safe, contactless payment method that allows them to get paid easily, but although credit cards can be convenient there are financial trade-offs to accepting them.
The British Retail Consortium (BRC) recently stated that merchant fees charged by credit card companies have increased in the last two years to almost twice what they were. With more people using cashless forms of payment, this increase could take a toll on small businesses and force them to cover their costs by raising their prices. Although credit card companies have disputed the BRC statement, it’s true that there are a host of complicated fees that businesses contend with when they decide to accept credit cards.
You might be aware that businesses accepting credit cards pay a transaction charge that amounts to a percent of each payment made, but there are many other fees on top of that that can add up to a hefty amount at the end of the month. For example, fees can be associated with the way a card is processed – whether it’s tapped, inserted, entered online, or taken over the phone. Usually if the card is not present at the time of sale, the fee will be more. There are also fees for authorisations, PCI DSS compliance for fraud prevention, minimum monthly service charges, chargebacks, card machines, and card machine set up.Â
Some of these fees, such as those for the card machine and its installation, can be fixed charges that businesses can plan for. When it comes to budgeting, problems can arise with fees for transaction and method of payment because they change according to how much a customer spends and how they pay. If a business decides to accept chargebacks this can also add an unpredictable fee into the mix. Additionally, if the trading patterns for a business fluctuate from month to month, they might be responsible for a minimum monthly service charge.
What’s a small business to do in the cashless world of Covid-19 to avoid all these fees without sacrificing the safety of customers and staff? One option is to use Ordo. Ordo is a payment app that is contactless, instant, secure, and allows you to get paid easily. There’s no limit on the amount you can accept, like contactless, because each payment is securely verified by the payer each time. And in contrast to credit cards, Ordo charges a flat fee of 20p for each smart request no matter the amount. Because smart requests can be made right from your phone or computer, there is no need to worry about hidden charges or card machines. Try Ordo today and your first 20 smart requests are on us!