What has changed?
EU legislation has forced Visa & MasterCard to reduce the cost price they can charge your merchant service provider for consumer credit card transactions by 0.5% whilst changing the flat pence charge on debit cards from 8p to 0.2%. This is why your ATV is one of the key factors, with the big winners being businesses such as cafes where a debit card transaction at £6 formerly charged at say 14p per entry would now be charged at circa 1%, effectively reducing the cost to 6p. At the other end of the scale a car dealership with a £10,000 transaction will have seen an increase from say 30p to over £25!
If your business takes consumer card payments over the phone, or online without 3d secure, then you’re also in line to benefit from a significant reduction in the non-secure transaction fees charged by Visa & MasterCard to the merchant service providers. These used to be as high as 0.85% and with some merchant service providers still charging high surcharges for non-secure transactions it’s another reason to check your monthly merchant services statement.
So what kind of hand are you holding?
At one extreme the café owner where you might buy your morning brew is likely to win the pot and closely challenged by an on-line business selling low value goods to consumers with 3d secure turned off. If you’re selling high value goods, you’re not going to be pleased with the hand you’ve been dealt on debit card fees, although you should still have seen an overall reduction depending on your acceptance levels of consumer credit cards.
As you’d expect the merchant service providers have been quick to change the rates for high ATV businesses but not so for those at the other end of the spectrum. There’s also the question of whether the dealer has dealt you the best hand available on your consumer credit card rates by passing on the reductions available.
To find out how the changes have impacted on your business costs we can provide a completely independent review, ensuring you’re receiving all the available reductions, and help you get one over the dealer!