Minimum Charges – 64% of respondents
While surcharges are now outlawed, minimum charge requirements on card spending remains legal. This allows retailers to cover card machine and transaction costs by requiring greater spend by their customers. The most common minimum spend amount is £5 and with the average 2017 card transaction in TRDP convenience stores reaching £12.05, many transactions are likely to be eligible for card payment if a minimum charge requirement is applied.
However, this plan may turn off impulse purchases, and could push people to the supermarkets who generally do not charge for card payments.
"The changes to come will force us to put a minimum spend on card payments which could mean losing customers or we may even have to increase prices to cover the costs and still have the same risk of customers looking elsewhere.”
– TRDP Retailer
Removing Card Payment Facilities – 7.1% of respondents
Removing card payment facilities altogether means retailers will no longer have to deal with card charges but as 50% of transactions are done on card (with contactless and mobile payments growing this is unlikely to do anything other than grow) retailers are likely to miss out on a major, growing market.
Continuing to charge – 12% of respondents
By continuing to charge for card payments, you definitely won’t be out of pocket but this is illegal, and Trading Standards are likely to be enforcing this.
Support from card payment providers
Some retailers are focusing their frustration on card payment providers, as they feel the fees are too high and cannot justify the payment for a small business.
"When customers purchase items under £5 we have no choice but to add a transaction fee as we make very little profit, exclusive of the additional cost to maintain the usage of card machines which is too expensive for us as a small business”.
– TRDP Retailer"
We asked one of our payment partners NetPay, for their take on this situation and what these changes mean for them as a payment provider.
"It is important that retailers and other businesses which take card payments are aware of this change in the law. There are bound to be examples made of those flouting the law, especially with the increased likelihood of customers reporting such charges to Trading Standards – there is very little point in taking the risk. We are aware that many businesses are facing narrowing profit margins, the impact of the living wage, rate rises and general increases in the cost of doing business and will find the charges hard to absorb and need to respond. At NetPay we will continue to offer the opportunity for merchants to effectively manage this cost and have a partnership with TRDP for those looking to take advantage of preferential rates. We offer businesses the opportunity to compare costs with their current supplier, so they can see how much they would save by signing up with NetPay to offset the increase in cost”.
– Carl Churchill, Managing Director of NetPay Solutions Group