New changes came into effect this month that affect the way card processors are charged by Visa for UK debit cards, which means your transaction costs could potentially increase.
Previously, card processors were charged a fixed amount per transaction (8p to process a standard Visa debit chip-and-pin payment, for example). Since 1 March, however, Visa has started charging a percentage of the sales value (0.2% of the transaction value plus 1p; capped at a total of 50p).
How does this affect you?
This means that the fees you now pay for card transactions are subject to a percentage charge rather than a flat fee and, as such, may be considerably higher than before, in order to include your card processor’s own revised mark-up.
Any transactions of less than £35 will be cheaper for card processors. But, they are under no obligation to pass these savings on to you. And, let’s face it, even if they did, how many bookings have you ever taken that totalled less than £35? Not very many, I’d imagine!
What should you do?
- Pay attention to any letters/emails you get from your card processor. You may well have already received communication about these changes, including any changes to your fees. Consider how any changes will affect your business and see if you’re able to negotiate a better rate, if need be.
- Remember, not all of them will follow the same strategy, so it might be worth shopping around or at least speaking to other businesses about what they’re being told by their payment processors.
- Revisit your own pricing strategy once you know how the changes will affect your business. Do you plan to pass all the increased cost on to your guests; will you split it with them; or will you leave things as they are?
- If you decide to increase the supplement you charge guests for booking with a debit card, you can do this easily by logging in to your SuperControl account and going to Admin > General details > Credit card processing and making the necessary changes.
Don’t panic
Changes are also planned for later in the year, capping the charges for credit cards. This means, potentially, the rates you’ll be charged for credit card transactions could decrease. So, it’s not all bad news.
