New Shop - merchant status harder than I expected.

[ChrisPDuck]

I'd really appreciate advice on getting merchant status.
We are starting a new retail business, but since I have an established business didn't expect any problems getting merchant status and credit card machine.
Went through my business bank. My business has been established for 4 years, and has had a good steady turnover. Although, on a personal level I have a CCj about 5 years ago, and have been struggling to make payments on time for the past year.
The banker asked me about the shop, when I said that we would be selling furniture (just one of the things we'll be selling), he said that was a high risk buisness and might be problematic.
So I'm unsure about how to proceed. Has anyone got any advice about how to get merchant status? We have signed a 5 year lease on our premises. We will be selling some high value goods, that need a card facility. We are not in the town centre, so no cash machines here.

 

[mdjo]

I'll be interested to see the replies on this issue too. I am looking to set up a Pet Shop and taking cards will be criticial, in-fact a deal breaker for this venture. I have set up and managed a similar business previously however this was on behalf of someone else, so have all the experience except in name only, which of course is the key criteria here. On a personal level I have excellent credit history albeit my personal account is with the dreaded Santander, mortgage and a couple of previous personal loans also
I am going to make appointments to go see a couple of banks next week with respect to banking facilities and merchant services

 

[kelvin1950]

I'll be interested to see the replies on this issue too. I am looking to set up a Pet Shop and taking cards will be criticial, in-fact a deal breaker for this venture. I have set up and managed a similar business previously however this was on behalf of someone else, so have all the experience except in name only, which of course is the key criteria here. On a personal level I have excellent credit history albeit my personal account is with the dreaded Santander, mortgage and a couple of previous personal loans also
I am going to make appointments to go see a couple of banks next week with respect to banking facilities and merchant services

+1 to this. We've opened an account with Nat West (as the branch is right opposite the shop we're negotiating on). The close proximity was vital as our business will be heavily cash based. The offered us £20 a month rental for the machine with 40p per debit card and 4% per credit card transaction. We said we'd think about it as we felt these were on the high side, even for a start-up.

 

[Sparx]

+1 to this. We've opened an account with Nat West (as the branch is right opposite the shop we're negotiating on). The close proximity was vital as our business will be heavily cash based. The offered us £20 a month rental for the machine with 40p per debit card and 4% per credit card transaction. We said we'd think about it as we felt these were on the high side, even for a start-up.

They are incredibly high! I would recommend www.cardsave.net.. We do (I'm not in Sales as I do Tech Support, but I'm sure of this) a maximum of 35p on Debits and 2.9% on Credits these days.. But you could get considerably lower still if you haggle with the sales manager if you book an appointment and/or if you show your expected Card Turnover isn't going to be incredibly low (i.e. £5k).

 

[emmylou74]

I was going to go with cardsave but they have taken sooooo long with the application process - in the meantime someone from Payment Sense came into the shop and offered a better deal so going with them. Debits 23p and c/c 1.6% - and apparently those rates go down after awhile as well.

 

[kelvin1950]

LOL, I work part time in a local garage. We use cardsave and we get frequent calls from payment sense. The two try to out do each other. Coupla months and one of them will offer to pay us to use their machine!

 

[davidakerr]

Make sure you read the small print with Cardsave. You have to join Cardsave and they have a quarterly payment of around £58.00 over and above the rates you pay, and they'll try and tie you into a 3 or 5 year deal...........be careful.

If you are a small business you could do a lot worse than check out the rates on offer through the FSB.

 

[David A]

WE are currently with HSBC, and with running a lettings agency tend to have high value transactions when tenants pay rent this way.

We only have 10 to 15 transactions a month, with a value of £7k to £11K, almost all debit cards.

It means that our transaction charges never usually go above £3 a month - yet we are always charged an uplift to the 'minimum' transaction charges of £15 a month.

A cheaper scheme is available through FSB, but having received an information pack find the requirements too onerous - 3 years accounts, business references, plus much more.

 

[The Secret Campaigner]

For a new business I would expect to pay between 1.4 and 2% for a credit card and anything from 20 to 30P for a debit card.

You can use an Independent Sales Organisation like Paymentsense, Cardsave, RMS, Handepay, Cardcutters, Acceptcards or you can go direct to your bank.

I would not recommend a long contract as a new merchant because you can get some amazing deals to switch once you have a machine. If you are stuck in a 5 year deal there is usually a financial penalty to get out early.

Be very careful with Cardsave they will try and charge you £120 irrespective on when you terminate. (They disguise Terminal Rental as Membership Fee)

I was interested to hear EmmyLous comments on her rates going down, Is this what the salesman told you or have you checked with the Company?

Be careful they dont try and charge you an authorization fee per transaction and watch out for the latest con which is PCI Compliance.

Traditionally, businesses where deposits are taken are classified as high risk. To overcome this the Merchant provider can ask for a non refundable bond or delay the length of time the money gets paid in to your account.

Most card companies put a minimum service charge on transactions (Around £20) so make sure you can afford around £30 - £40 a month to cover the cost of having a machine. (Terminal Rental + card charges)

Hope this helps

 

[emmylou74]

I was interested to hear EmmyLous comments on her rates going down, Is this what the salesman told you or have you checked with the Company?

Be careful they dont try and charge you an authorization fee per transaction and watch out for the latest con which is PCI Compliance.

Traditionally, businesses where deposits are taken are classified as high risk. To overcome this the Merchant provider can ask for a non refundable bond or delay the length of time the money gets paid in to your account.

Most card companies put a minimum service charge on transactions (Around £20) so make sure you can afford around £30 - £40 a month to cover the cost of having a machine. (Terminal Rental + card charges)

Hope this helps

this is what the salesperson told me - I have a meeting tomorrow, will check the contract over then. I did forget to mention the monthly charge of 19.95 per month not including VAT.

 

[The Secret Campaigner]

I would be interested to hear what you discover on the contract.

Paymentsense are one of the better companies out there but I doubt they will reduce your rates. They offer a guarantee that your rates are capped for the duration of the contract (Usually 5 yrs).

Keep an eye out for PCI Compliance after 1 year they will charge you for something you may be able to do yourself for free if you do a little research.

 

[emmylou74]

yes she mentioned that the rates were capped for a year then they go down. To be honest even if they don't go down I still feel its much better than what card save were offering.

Will look out for the charges for PCI compliance thanks for bringing that to my attention

 

[The Secret Campaigner]

Yes I would agree, most deals out there are better than Cardsave. I just hate to see businesses being ripped off or lied to.

Always read the contract so you can back up the sales persons claims or get it in writing.

 

[John_Orcus]

My sister has been with Payment Sense for about a year, and recommends them. Good rates and decent service.

 

[ChrisPDuck]

Having had a good look at my credit file, am beginning to see a clearer picture of things. Like the mrs. failed to tell me that the mortgage hasn't been paid for a couple of months. Can't be too cross, should have seen it coming. We've been struggling due to my biggest clinet going bust.
Now my immediate problem is that I've got a great shop ready to go, about £20,000.00 worth of stock that I need to get out there and sold. But without the ability to take credit cards its going to be impossible. Really at a loss.

 

[emmylou74]

How could you not know that the mortgage had not been paid? Not that that matters now.

What companies have you tried to get a debit/credit card machine from?

 

[ChrisPDuck]

How could I not know?No one knows more than I how stupid I've been.
But to move forward. I've only tried my bank, but have made enquires to a few mainstream companies who have said that any bad credit will not be excepted. My business and business account has been good for all 5 years. This year I lost a big client and another went bust. So I'm trying to make new business, really didn't think it would be a problem, didn't realise our personal finances had got so messy. I clearly buried my head in the sand and need to find a way to sort it all out.

 

[emmylou74]

Just approach companies that offer a debit credit machine fill out the forms and wait and see if they accept you then - don't tell them about the previous bad credit.

The two companies I spoke to never once asked if I had bad credit first. So just start applying.

 

[The Secret Campaigner]

All banks will assess risk in different ways, the main thing which might go against you is if you have any ccj's. Even then you may still get a card facility with restrictions. (Non refundable deposit or delay in payment to your account.)

What type of shop are you wanting to open?

 

[Doodle-Noodle]

We joined the FSB when we first opened and they set up our Streamline/card machine facilities for free; no rental for 3 months, competitive ates etc. They also installed our landline for free, did us a good deal on insurance etc plus there's loads of other benefits (free legal help etc) which are well worth having.

 

[ChrisPDuck]

Hello,
I'll be selling garden and homewares. Really confident in my products, have been testing the market.
I'd take a card facility with restrictions, right now. But am unsure about what to do - many companies seem to be offshore or American (I wary of this - can't seem to find out enough info). Kind of paralysed by the fear of unsuccessful credit checks too.

 

[Sparx]

I was going to go with cardsave but they have taken sooooo long with the application process - in the meantime someone from Payment Sense came into the shop and offered a better deal so going with them. Debits 23p and c/c 1.6% - and apparently those rates go down after awhile as well.

Apologies it has taken so long with Cardsave, could I ask how long it has been? A general rule of thumb is 3 weeks realistically.

But just to pick up on the 'those rates go down after a while as well' - please bare in mind all of PaymentSense's contracts are 3 years to 5 years at minimum. So yes, it will be a while before they go down, if at all much.

Make sure you read the small print with Cardsave. You have to join Cardsave and they have a quarterly payment of around £58.00 over and above the rates you pay, and they'll try and tie you into a 3 or 5 year deal...........be careful.

If you are a small business you could do a lot worse than check out the rates on offer through the FSB.

All of Cardsave's contracts are 12 months as standard and is stated so at every signing. The longest one I have seen was 3 years and that was either because they got a good deal on their rates/rental or was on a 2-for-1 terminal deal (rent 1 get a 2nd free basically) - even then, every single merchant is aware of our contract lengths as it is the first paragraph of the first page in the agreement in a very large font you can't miss..

 

[The Secret Campaigner]

Do cardsave charge a termination fee after the 12 months? My experience with cardsave is they usually charge £120 to leave them. Which is not that high compared to others.

 

[emmylou74]

Apologies it has taken so long with Cardsave, could I ask how long it has been? A general rule of thumb is 3 weeks realistically.

But just to pick up on the 'those rates go down after a while as well' - please bare in mind all of PaymentSense's contracts are 3 years to 5 years at minimum. So yes, it will be a while before they go down, if at all much.

I applied in August. Well the salesperson said after a year you can call and see about getting the rates reduced. But like I said even if they don't reduce the rates its still a better deal for me just now. It is a long contract - 60 months with an 18 month get out clause. But I have been in business for over 8 years now so not too fussed about that.

When I originally spoke to the salesperson at cardsave I was given the quote for the charges and told unlike other companies we have no hidden charges. Great I thought, funnily enough nothing was mentioned about the membership fees though at £58 not including VAT every quarter!!!!!

 

[davidakerr]

Originally posted by Sparx All of Cardsave's contracts are 12 months as standard and is stated so at every signing.

Not so...........not all Cardsave sales people mention that fact. There is more commission in selling a deal for 3 or 5 years. I see you are a Cardsave sales person.............don't you have to join Cardsave first and pay a quarterly fee? Be careful how you answer because I have a copy of an agreement issued by a Cardsave sales person.

 

[Sparx]

Do cardsave charge a termination fee after the 12 months? My experience with cardsave is they usually charge £120 to leave them. Which is not that high compared to others.

No, our older type contracts used to have the termination fee you stated. But we changed the contracts I think in 2009/10. Currently, our contracts are just 1 year rolling agreements where if 30 days notice is given prior to the renewal date, your account is closed with no fee.

I applied in August. Well the salesperson said after a year you can call and see about getting the rates reduced. But like I said even if they don't reduce the rates its still a better deal for me just now. It is a long contract - 60 months with an 18 month get out clause. But I have been in business for over 8 years now so not too fussed about that.

When I originally spoke to the salesperson at cardsave I was given the quote for the charges and told unlike other companies we have no hidden charges. Great I thought, funnily enough nothing was mentioned about the membership fees though at £58 not including VAT every quarter!!!!!

Emmylou, the £58+VAT fee is your monthly rental, just paid every quarter instead. Your monthly rental is taken by Direct Debit every 3 months (Monthly Rental x3). The only other fees are your rates per transaction which Streamline take once a month. You are not not paying any more by doing this.

Originally posted by Sparx All of Cardsave's contracts are 12 months as standard and is stated so at every signing.

Not so...........not all Cardsave sales people mention that fact. There is more commission in selling a deal for 3 or 5 years. I see you are a Cardsave sales person.............don't you have to join Cardsave first and pay a quarterly fee? Be careful how you answer because I have a copy of an agreement issued by a Cardsave sales person.

No, I don't work in Sales - I work in technical support for terminals.

Your monthly rental with ourselves is always taken quarterly (monthly rental x3) - we do not charge any other fees other than the rates per transaction which Streamline take by their own Direct Debit each month. We do not charge any other fees, i.e. annual charges, PCI compliancy fees, membership fees, etc. Some members get asked to pay a setup fee but that all depends on signing and what kind of deal the sales rep is doing for the merchant initially.


Hopefully that clears up a few things..

 

[YorkShop]

Hi dears,

we are opening a new shop in York and for what I understood from Barclays we can get a 12 month contract with 25p per debit card and 2% on credit cards. £ 125 if we leave before 12th month.

We were told that the costs from debit and credit cards depend on our turnover and how much the transactions worth: so we can save money if turnover is high and average on transactions are medium-high.

Because we are going to sell both expensive items (fine bone china) and cheap items (gift, housewares) we actually expect to pay for debit cards between 25p and 27p and for credits between 1,9% and 2,1%.

do you feel I have to sign with Barclays (we have the account with them)?
I have seen Barclays use 3 different codes depending if you are customer already or not and this affects the costs. Have you seen something similar before?

Kind regards

YorkShop

 

[The Ginger Ninja]

deleted - wrong thread.

 

[The Secret Campaigner]

The deal from Barclays doesnt seem that bad. If you dont do many transactions then the odd .5% or pennies per transaction isnt going to make that much difference.

The advantage of Barclays is that you bank with them already which means the money should be in your account quicker than if you used another provider.

Just make sure they dont charge you an authorization fee per transaction or a PCI Compliance fee.

After 12 months you can shop around for a better deal

 

[willj87]

I'd be happy to offer ANY UKBF member 1.4% on credit cards and 17p on debits, whether they are new to cards or existing card users. This is based on 80% + transactions done with a customer present.

Please contact me for rates that have a higher CNP percentage.

These rates are capped for 4 years, guaranteed, meaning if someone offers you a better rate, we'll beat it again for you. Meaning you can never be paying less than with us!

If you want more info... PM me.