Payment Sense and FDMS are crippling my beauty salon. It's about to close.

[GazNicki]

Hi

My wife opened up a Beauty Salon in May 2016, so it's been operating a little over a year.

We signed up with Payment Sense to process the card payments, but it's nothing like what we expected. The costs associated with it are more than we expected to be paying and the setup is crippling the business.

We are tied into a 3 year contract with them, but if we don't terminate this service ASAP we are looking at having to close the door.

We are paying:
£20.40pm POS Term Rent
£12.95pm Client line Fee
£24.95pm minimum transaction fee
Then there is the PCI DSS charge every quarter
And in April we was hit with a £47.88 Account Online Fee

The monthly charges are absolutely murdering the books when some months the outgoings to have this unit are almost £100.

We honestly cannot afford this unit. We contacted them about it a while back and they said we could leave after 18 months but it would cost us £400!!! We don't have that residual cash to just outlay that kind of charge.

Can anyone help us with some advice? Please?

Thanks,

Gaz

 

[Scalloway]

If your business can't stand that kind of a cost then I think you need to take a long hard look at it.

Can you increase prices?
Can you get more customers?

 

[gingerdad]

I have to agree with above if you can't cope with a 100 quid you've got much bigger issues.

 

[GazNicki]

Not overly helpful really.

The business started in 2016 and is a small beauty salon above a hair dressers. It is run by the wife on her own operating one-to-one appointments.

The turnover for 2016/17 was £11k, with an overall loss in year one of £1500.

As it's new the client Base is still being built up.

However no wages are taken as yet from the business. Yes, it's not overly successful and it's not setting the world on fire, but it's building.

However the cost of the card machine is the 3rd highest outlay. We have rent as the biggest outlay, stock and then the card processing.

I need advice on what we can do with the card processor as the costs are higher than expected and can honestly be afforded.

 

[TotalWebSolutions]

If these fees are not stated in your contract you may have a case but they should certainly show. As above, if there are some things you can take off or get a reduction on (whilst having to ride out the contract) it might be worth asking them to look at it. The minimum monthly seems quite high but might have been based on low projected turnover?

 

[Nochexman]

My wife opened up a Beauty Salon in May 2016, so it's been operating a little over a year.

What is the status of your business; is it a limited company? Do you or your wife have any personal liability?

 

[Airpos]

This is why we're partnered with PayPal and iZettle folks, simple no contract payments at a predictable rate. I hear constantly that 2.75% flat is too high but when you consider tha's all you have to pay I genuinely believe they are a much better option for the micro-merchant.

 

[Mr D]

Yes, we took out a 3 year contract for a card machine to take to events, just before paypal started doing their own card machine idea.
In 3 years and over a hundred events not one person paid by card - a half dozen events previously we had lost sales over not being able to accept cards.
If had waited could have saved hundreds of pounds by using paypal.

 

[Alan]

What is the status of your business; is it a limited company? Do you or your wife have any personal liability?

This is an important question, as if you are a limited company with no other liabilities / debts or guarantees, then you have an out. Many would debate ethics of folding a company ( and setting up another ) to get out of a contract, but it doesn't mean it is not a real choice.

 

[mhall]

You can get rid of your PCI fees if you confirm all the nonsense they ask for. If you are purely using a phone line for your cards this will be quite easy.
You will have two contracts, one for the machine and one for processing. Study them both to make sure you have not got a get out. If you are not a Limited Company then check to see if you have signed a personal guarantee - you probably have. Study those contracts- we got rid of payment sense when we discovered the sales person had actually filled the form in AFTER we had signed it - they shout a lot but won't actually take you to court.
Alternatively, build up your card sales. As a salon customers will pay for products as well as services. The more products your wife sells the more likely they will use their card. We have a salon and it does take a while to build a customer base but ladies will stick with a therapist/beautician if they trust them and will buy what they recommend.

 

[Zoes - GeoFloor Ltd]

I used to work for First Data (Don't linche me) The terminal and PCI fee's there is nothing you can do about them.

Clientline tell them you don't want it and you will get your statements from the on-line portal also speak with them about reducing the MMC - Unfortunately you will only be able to speak with Paymentsense help desk team as all their calls are directed through to them rather than the FDMS help desk.

In regards to the terminal if you are a sole trader rather than a LTD you can come out of terminal contract after 18 months. I'm not sure if there are any charges for coming out early as i haven't worked there for 2.5 years now but the £400 sounds to me like a closure charge and to come out of the terminal contract.

All i can say is PaymentSense offer very low rates to entice people in and the reps are all commission only so from what i have heard is will tell you anything to get you signed up!

 

[GazNicki]

Hi all, just a quick update.

I gathered together a few statements to ensure I wasn't going insane and the charges were too high. One month £300 was taken in card sales, and £100 was taken in fees. That's 33.3% cost.

I gave PaymentSense a call and was put through to the retention team, and a wealth of charges got reduced or changed.

Minimum Spend was reduced from £24.95 to £4.95, other smaller charges they had added on (2x £1.99 p/m) were removed, and the ClientLine Online fee was also removed. With the terminal rental, the minimum charges and the VAT, the cost per month is now less than £30 per month - and that is including the PCI DSS.

I did query why I was being charged for the PCI DSS, and why i was being tasked with it when PayPal and the likes don't charge or require testing - and all I got was "It's in the terms and conditions". No great help, but I spoke with the wife and the cost of the professional card reader outweighs the ball-ache of the cheaper PayPal et al card readers she has had experience of. So for now, its much better and happier. We await our next statement however.

 

[Zoes - GeoFloor Ltd]

Good news... It's always worth giving them a call.

It used to be the case in regards to why you don't do pci dss with the small card reader is they are for micro merchants. Usually less than £10k a year on cards and all face to face so it was thought the risk exposure was minimal and that the merchant (you) would take the liability. Always check the small print and T&Cs

 

[Lady10153]

This thread is so good. I got roped into Payment Sense and their low fees and wasn't aware of the hidden 5 yr contract I signed up for with FDMS. So reading all of the above has reassured me that I can speak to someone and how to. Also that if all else fails I, as a LTD company can throw up my hands and start again. Thanks you guys.

 

[TotalWebSolutions]

Glad you managed to get a reduction @GazNicki . Still worth shopping around when you are out of contract (or coming close to the end).

The scope for PCI compliance has increased over the past few years but if you can complete the annual self-assessment questionnaire you should be OK. If you struggle with getting the compliance 'tick' get on to them straight away for assistance so that you avoid mounting non-compliance charges.