Card payments have surged in the past couple of years; likely a consequence of the trend towards a cashless society combined with a reluctance to exchange cash during the pandemic.
While restrictions were in place, cash was rarely accepted as a means of payment, and it looks as if this is set to carry on with more and more payments being made through card readers.
According to figures from UK Finance, a trade association for the UK banking and financial services sector, in 2020 over half of all payments in the UK were card payments.
Retailers largely encouraged card and contactless payments, whilst shoppers were forced to transact online when physical stores were closed during the lockdowns.
With card payments currently ahead in the payment ‘race’, businesses may wish to make changes within their business to accommodate this preference.
Security is vital, both for customers and businesses, and there is a vast range of different debit and credit card machine providers to choose from, yet only three main types of machine; countertop, portable and mobile device.
What are the benefits of each payment device?
Countertop card readers are fixed points in your store or restaurant, (i.e. at the till point in a supermarket) where payment can be taken on a card, and these typically offer good connectivity.
Portable devices are linked to Wi-Fi and are ideal for the hospitality industry, enabling staff to move freely around a venue and take payments at tables, or wherever convenient for the customer.
Mobile card readers are often rechargeable battery-powered devices that rely on a GPRS signal (but can also link to Wi-Fi), to take payments on the move. You might come across these at market or trade events, for example.
If you’re currently considering introducing card payment facilities to your business, there are several platforms on the market that you might like to look into, including:
- TakePayments
- Tyl (by Natwest)
- Paymentsense
- Shopify WisePad Reader 3
- SumUp Air
- Zettle Reader 2
- Square Reader
- MyPOS Go
- Dojo Go
- Barclaycard Anywhere
What are the costs involved?
You should consider the cost of purchasing the device, as well as any fees associated with processing transactions. Mobile readers cost between £15 and £30, while desktop or countertop card machines are typically more expensive, at around £150-£200.
It is possible to buy devices outright, or to rent them for a monthly cost, which will depend upon the provider.
Card payments: what fees will the business be liable for?
Transaction fees are taken by your card payment provider, as a percentage of every payment made through your machine. These are typically between 1.5 and 2 per cent of the value of the transaction in question.
Example:
Customer X buys an item costing £50
Your transaction fee is 1.75 per cent of the value of the transaction
Your card payment provider will charge you around 87 pence
It’s worth bearing in mind that fees for processing transactions where neither the cardholder nor card are present – ‘card not present’ (CNP) transactions – are often higher due to the greater risk of fraud associated with these.
How can George Hay help?
Whether an established business or start-up, if card payments are new territory for you, this is bound to be daunting. Truth is, making changes to your business doesn’t have to be scary, with the right support in place.
We can help you to identify the technology available to you; we can ensure that you understand the cost implications for your business, and we can support you to make sure that whatever you choose operates seamlessly alongside any other digital tools or accounting software that you already use.
There are existing partnerships between some card payment providers and cloud accounting software providers, making it even easier for you to link up your sales and accounting.
If you’re perhaps thinking about starting to take online payments, via PayPal, Stripe or GoCardless, for example, these can also be integrated with your invoicing software. This will serve to automate most of the invoicing and payment process and, more often than not, you’ll get paid quicker as a result.
For the short term investment, embracing new technology and cloud accounting software could really have a positive impact on your cash flow in the longer term.
Contact our team of chartered accountants and business advisers in Hertfordshire, Bedfordshire and Cambridgeshire, today, to get the ball rolling.
