We are looking for a low-cost credit card facility
A small Community Shop and Post Office with an annual turnover of £100,000 would like to introduce the facility for customers to pay via credit/debit card. They estimate that they would have 4-6 transactions via card per week. Can anyone advise on suitable providers?
We have recently set up a card processing facility with an outfit called Retail Merchant Services - www.retailmerchantservices.co.uk
Too early to recommend them per se, but their charges seemed reasonable. Off the top of my head we pay a quarterly fee which covers the rental of the terminal (you can buy one for about £500, but then you have to think about what happens when it goes wrong), plus we pay a per transaction fee which is pretty low - about 25p for a debit card and one and bit per cent on a credit card.
Notably for the shop you are referring to James there is a minimum monthly fee for this payment processing element - £20 I think - which comes in if your number of transactions is low. My guess is that you could shop around and maybe find a provider that offers perhaps a higher per transaction fee with no monthly fee which might work better for this shop, but one or another the processor and the acquiring bank will get their slice of the action.
On the upside, we introduced it deliberately, despite the fact that our average basket value is around a fiver, because we do have a significant number of customers who spend more than that, and we wanted to enable them to spend more without having to worry about whether they had enough cash in their pocket.
It costs us about £20 a week to operate the service so we don't need to generate a huge amount of additional sales each week for it pay for itself (approx. £60 given our normal margins, which on an average weekly turnover of about £4500 - £5000 is not too steep a hill to climb.
I would say that this type of service is exactly the sort of thing that the Community Shops Network could be providing as a joint purchasing exercise. Together we are much more powerful and could negotiate a rate that would be advantageous to all. Having said that of course we have now signed up to a three year contract!
I would be very keen to learn about the providers that other shops are using and the fees you are paying.
The FSB (Federation of Small Businesses) have a useful card scheme which avoids upfront payments and gives a 3 month period without rental charges - per transaction charges are also reasonable circa 23p depending on which card is used. We use this and has worked well for us with turnover circa £145k pa.
Bryan Casbourne
Mortimer Country Stores
Andy Barker from Frensham Community Shop asked the original question to this topic and has prepared the attached report following much investigation. Andy would be keen to hear from anyone who has comments on his report, or indeed any other experience of either:
Great paper from Andy Barker - many thanks to you Andy for sharing your work, and to James of course for posting it on the site.
One thin that I missed form my earlier comment on the issue of card processing - one of the reasons we went with Retail Merchant Services is that the terminal they were offering enabled us to connect using a broadband connection (which we have in place) where others were indicating that we needed a dedicated phone line (which would obviously increase the cost by another £11 per month) - although from what others are saying in this thread it appears you don't need a dedicated line if you are prepared to put up with the risk of not being able to connect is the line is already busy.
As I recall other providers were offering a terminal than connected via the mobile phone network - fine if you can get a decent signal on the network that the terminal uses, but obviously not always a given for rural locations.
We use a Streamline service via the FSB and operate over a single phone line for broadband, phone, and the card m/c (which is dial up). No real problems other than occasional clashes between dial up and calls. Our average no of transactions are around 4/5 per day (we are very rural). If anyone would like details of transactions and costs etc we would be happy to share our info - just ask with email and will forward info.
Bryan Casbourne
Mortimer Country Stores