Follow the Money
It's about time Queensland small businesses got with the times and started accepting card payments, writes Suzanne Oxford.
My local fish and chip shop is standing defiantly as the last bastion of cash-only sales in our suburb. If you want to pay with plastic, the owners send you across the street to the ATM, which gouges you $2.20 for the pleasure of your company.
Having just spent an afternoon at Brisbane's Southbank Markets, where every vendor offers mobile credit card payments so seamlessly I could barely feel my account balance dwindling, I was curious enough to ask my fisho why.
"Well, people are willing to pay cash..."
According to the Australian Payments Clearing Association - the authority for all credit card and EFTPOS transactions nationwide - Australians withdraw $11.7 billion from ATMs each month but spend $19.8 billion with their debit cards and $24.3 billion by credit card.
Put simply, the trend is overwhelmingly towards contactless card transactions, with cash sales plummeting by around 5% every year.
It's not a question of whether most customers are willing to pay cash. The real question is how much revenue you're missing out on because so many customers aren't.
"It's just too expensive to take cards..."
So let's talk about the real costs of offering credit card payments.
If you run a retail business, then you'll know the costs can certainly add up. Traditionally, getting hooked up for credit card transactions meant paying for a dedicated phone line, a lock-in contract, admin and set-up fees, charge-back fees, contract-breaking fees, over-the-phone authorisation fees, and more. Before you even processed your first payment, you were looking at a $1,500 cost for the year.
Thanks to smartphone technology, though, the world has turned. Providers like CCIQ Pay offer new generation technology that does away with the need for lock-in contracts, dedicated phone lines and the like. Instead, CCIQ Pay piggybacks a payment machine onto your smartphone, and doesn't charge hefty transaction fees or lock you in. It has never been easier to offer customers multiple ways to pay, which is why so many tradies, cafe owners and mobile vendors are jumping on board with the technology.
Then there's the transaction fees, usually a flat percentage of your monthly card takings. Happily, these are lower than a decade ago - but, of course, they still add up. As the mobile credit card reader market becomes mature, you'll find the more scrupulous providers are simply charging transaction fees without any hidden fees or charges.
"...And I can't make the fees back from my customers."
Ah, yes you can.
Since 2013 amendments to the Reserve Bank Standards, merchants are allowed to charge an additional fee for credit card transactions. This surcharge is limited to the "reasonable cost of acceptance" but it can include, among other things, the service fee charged by your financial institution.
You can charge a flat fee or a percentage - it's your choice. You just need to clearly tell your customers you're doing so before they pay. In any case, consumers are used to switching their plastic depending on the sign on the register. 'American Express attracts a 2% fee? OK, so here's my MasterCard instead.'
Or you could always put your customers first. So the banks charge you for a convenient method of payment. Consider the transaction cost part of doing better business.
As we near the end of the cash age, and with contactless payments on the rise, it makes sense to follow the money if you want to make more of it in your business. Check out CCIQ Pay here.