Does it cost too much to accept credit card payments?

With over 490,000 outlets in the UK accepting credit and debit cards, plastic cards are now the preferred method of payment in most retail sectors.

There are undoubtedly many advantages, but the major downside for the retailer is the cost of processing such transactions. So, is there anything that can be done to reduce these credit card costs?

Looking at the advantages first of all, accepting payment cards will benefit businesses by: 

• Providing an easy and convenient way for customers to pay
• Prompt and assured payment
• Speed at the checkout
• Reduced office administration
• Reduced cash handling

Credit cards undoubtedly generate additional sales, as they provide customers visiting the outlet with an average additional spending power of £1,500 each, and the freedom to buy on impulse.

But they also generate additional costs. All card processors charge for each transaction, a percentage of the payment amount in the case of credit cards and a pre agreed charge per item if the payment is by debit card. So the profit margin for the retailer on each sale on credit card can be less than by other payment methods.

The charges are determined by a multitude of different factors such as the prevailing interchange rate, business sector, nature and size of payment transactions, method of processing and method by which the customers authorise the payments. Each card processor has their own distinct policy which determines their individual charges.

If you are concerned at the level of fees you are paying to card providers, talk to us here at Spiral. We have knowledge of the card payment industry and a wealth of past experience gained from tackling credit card charges on behalf of many different clients.

Our reviews are undertaken on a risk free basis with no fees payable up front, as our fees are based purely on successful results.

Our track record suggests that in the vast majority of cases, savings are available on credit card fees to directly enhance the bottom line for our clients. If you would like us to undertake a review for your business, contact us for more information.