Card transaction costs affecting small firms
Fri, 06 Nov 2009
Small businesses should assess the market to see if they can reduce the cost of processing card payments, it has been claimed.
According to the Forum of Private Business (FPB), many companies are paying steep rates to the providers of credit card merchant services because they do not have the time or resources to shop around for a better deal.
Some are not aware they can use the credit card merchant services provided by lenders other than their existing banks, the forum claimed.
Nick Palin, the FPB's director of finance, said the prices for merchant services are increasing, potentially increasing the pressures placed upon small firms.
He said: "Controlling costs is so important yet many businesses simply do not review how much they spend on taking card payments.
"The solution is to shop around, but this is easier said than done for the majority of small businesses – some are not even aware that switching to another provider is an option.
According to the FPB, traders who do not take card payments are increasingly losing out on business, as spending on plastic continues to rise.
It reports that over 65 per cent of all retail transactions were completed by card in 2008, with a total value of £360 billion.
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