Merchants Have Never Paid Less For Point of Sale and Payments

We’ve all seen the adverts, card processing from 0.3%, ePOS from £99, free terminal rental, the list goes on but of course, the devil is always in the detail (or the small print) and you know that somewhere, somehow, you’re going to end up paying much more than what you thought on the way in. Whether it’s PCI fees, minimum transacting amounts, support contracts, paywalls and subscriptions, or any of the other hidden fees, no matter the tactic, there are no companies on this earth who can offer you a complete point of sale and payments setup for 0.3% of your sales or for £99 a month and remain in business, and you know it!

Let’s take a look at the two most common offerings in the market.

Card Processing Services

What you get:

A terminal device for processing transactions via credit card, debit card, AMEX, and sometimes a wider range of cards such as Union Pay or Diners Club.

What you don’t get:

No integrated payments. Typically, the providers who only offer a card terminal don’t integrate with point of sale providers, meaning that to use their card machines, you have to re-enter the transaction twice: once on the terminal and then again on the point of sale. This is rife with problems including human error, the speed of the transactions (especially when very busy), and of course, employee fraud as it’s an open door for those who know how to defraud their employers.

Difficult reconciliation of payments. Of course, having separate providers means that your payment data comes from two different places and will have to be pieced together manually either by you (bye-bye weekends) or by your accountant or bookkeeper, leading to even more fees.

Point of sale hardware and software, this will be a significant extra and is required as you can't operate your business off only a card terminal.

Analytics such as in-depth reporting on your sales and inventory, cost price analysis, the ability to use customer accounts, loyalty, accounting automations, and much more. Essentially, a point of sale system should be a cornerstone in operating your business, not just a glorified calculator that helps you to add up your sales.

What you pay:

Processing Fees:

No matter how it’s been sold to you, you can bet that you are paying between 1 and 2% of your overall card processing volume over time. Yes, you will pay less for personal debit cards but this will be made up on the business debit cards, credit cards, American Express, and others.

Terminal Rental Fees:

Typically around £20 per terminal per month, these are simply a ‘terminal tax’ as the provider will have paid off the cost of the terminal within the first six months of use but you’ll pay this forever, making for a healthy bottom line in profitability for them which they’ll use to make your processing fees look less than others. This is a subscription by any other name.

PCI Fees:

A stealth tax, again contributing to the bottom line and allowing the provider to make their processing fees look less.

Card Network Fees:

These are the fees charged by the card network providers like Visa and Mastercard if you’re being billed for these then your provider is using you to pay their own overheads.

What To Watch Out For

Contracts! Ask yourself the question, if this is all open and transparent why do they need me to sign a contract? In particular, watch out for there’s no contract for the POS and payments but there’s a multi-year contract for support. This is because POS and payments contracts can now only be 18 months long legally., A common con.

Awful support. If they have you in a contract they have no incentive to support you well as they are at no risk of losing your business. One payment outage with poor support and all of those so-called savings you made on this ‘cheap’ provider will be made up for and then some in lost revenue.

Overall? Money for nothing in comparison to newer offerings. In the past 10 or so years, small and innovative companies have taken advantage of better technologies such as cloud computing and open payment architectures to create systems capable not just of handling your payments but also managing your inventory, helping you to account better, helping you to sell online successfully, and much more.

‘One Stop Shop’ Point of Sale and Payment Solutions

What you get:

A system for managing your whole business providing point of sale software, fully integrated payments, inventory management, in-depth reporting that helps you to make better decisions, and automated accounting helping you to streamline your reconciliation, VAT reporting, and more. And with technical support bundled into the pricing too.

And this is the tip of the iceberg! Beyond what these companies consider the basics, you’ll also get huge value adds such as the ability to manage customer accounts, payment links as a much more modern and efficient (and much more affordable!) alternative to over-the-phone payments, in-built loyalty schemes, e-commerce integrations, and much more.

What you don’t get:

Awful support. With no contracts, these providers have to work as hard to keep your business as they did to win it and that means not just good but great support as you are free to go elsewhere any time.

Hidden Fees. Again, these companies have to be the honest broker if there’s no contract. They can’t charge hidden fees, you’ll simply go elsewhere.

Bad software. Once again, no contract means that the thing has to work and work very well!

Subscriptions. The best in class of these types of companies don’t rely on terminal rental fees, software subscriptions, or anything else. Beware the ‘free’ providers as they will have to find ways of adding fees to your offering usually through features further down the road. You're really getting an extended free trial until you run into some limit you have to pay to remove.

What you pay?

Typically between 1 and 2.75% of your transactions which of course means you’re only paying these companies when you’re selling, meaning that they only share in your success. If you have a slow month, they do too.

Overall?

A one-stop shop provides you with everything you need for much less than working with multiple providers as well as giving you a single touchpoint for support which makes life much easier when things go wrong. And not just value but value add as they add new features that can enhance your business as well as growing your bottom line. Remember if I get paid a percentage of your transactions, it's as much in my interest as it is in yours to grow that revenue!

Get in touch with us at AirPOS Pay if you'd like to know more