- Original Poster
- #1
Hello all,
Just wondering what other retail businesses are doing now with their card payments in response to the recent change in legislation. What did you do before? How are you going to continue to cover the costs of your card machines and merchant banking accounts? How will you make up for the loss in revenue?
As I understand it, the change in law makes it illegal to charge a 'transaction fee' when taking card payments. However, after doing some preliminary reading on the subject some fast-acting retailers have circumvented this by charging a 'service fee' instead of a 'transaction fee'. Allegedly, one will argue that the 'service fee' is for the optional service of offering to take and process a card payment, a different method of payment, to say cash or bank transfer, which are otherwise charge-free. This apparently is a grey area which is not by the letter of the law illegal and yet to be challenged in court.
The crux of the matter is, and all business owners with card machines know this, we have overnight lost the margin made between what it costs to process a card and what we charge to take that payment from the customer. Which in our instance, when selling £10k + vehicles, makes a considerable difference at the end of the year.
For years we have staved off the urge to charge an Admin Fee - a growing trend in our industry, particularly among larger car supermarkets - and perhaps now is the time to roll this out.
It is supposed to spur on a retailer-led revolution in card processing... Hmmm...
Just wondering what other retail businesses are doing now with their card payments in response to the recent change in legislation. What did you do before? How are you going to continue to cover the costs of your card machines and merchant banking accounts? How will you make up for the loss in revenue?
As I understand it, the change in law makes it illegal to charge a 'transaction fee' when taking card payments. However, after doing some preliminary reading on the subject some fast-acting retailers have circumvented this by charging a 'service fee' instead of a 'transaction fee'. Allegedly, one will argue that the 'service fee' is for the optional service of offering to take and process a card payment, a different method of payment, to say cash or bank transfer, which are otherwise charge-free. This apparently is a grey area which is not by the letter of the law illegal and yet to be challenged in court.
The crux of the matter is, and all business owners with card machines know this, we have overnight lost the margin made between what it costs to process a card and what we charge to take that payment from the customer. Which in our instance, when selling £10k + vehicles, makes a considerable difference at the end of the year.
For years we have staved off the urge to charge an Admin Fee - a growing trend in our industry, particularly among larger car supermarkets - and perhaps now is the time to roll this out.
It is supposed to spur on a retailer-led revolution in card processing... Hmmm...
