Are you still paying or going to pay too much?

Pre-Covid, businesses were quite happy to take advantage of tax breaks, low cost of borrowing and enter long-term, typically, 4-year lease-finance purchase for new Epos systems or rental agreements for Merchant terminals.

Post-Covid, not so, whilst there are still alternatives to cash, some businesses have been lured to the prospect of free or very low-cost Epos systems and or Merchant terminals, with very low-monthly costs and almost no fixed contract period either, BUT and it is a biggie, much higher card rates and transactions fees, which add up quickly, whilst on the face of it still appearing low, until you check your statement.

Merchant terminal

With more contactless transactions taking place now, and with a greater spend, these costs will rise very quickly!

Pre-pandemic contactless in the UK, accounted for 40% of all card transactions, according to Barclaycard, last year these rocketed to almost 90%, with the single transaction limit at £100 now up from £30.

A quick example, take a good debit card rate of 0.35% per transaction and one of the higher charge zero contract options at 1.75%, still quite low compared to other business charges … you would think?

Now apply £70,000 of monthly card purchases in a business, one cost is £245 in charges, and you can add a tenth in per terminal fees, the other is £1,225 not such a good deal, is it?!

So, what are the other alternatives?

Especially, as life post lockdowns is not going to be a mad rush, may be a little hit and miss for a while and will take time to re-establish itself to 2018 levels.

  1. For Epos, don’t use a free one tied to a card provider , unless you can use a mini-pos with one of the new Android 4G Wi-Fi combined tablet / card terminal devices like the PAX A920, also check on any additional data costs as with some providers it is free, others £5 per month and other purely bandwidth at ridiculous prices, as well as all card rates and extra charges.
  2. Alternatively, take advantage of a lease purchase package, with the additional tax relief that is available including the 130% tax relief for a Capital investment into your business, however, reduce the interest if you can and choose a shorter repayment period.
  3. Choose the equivalent of a Saas (Software as a service) solution, effectively a long-term owned part-rental option, a monthly fixed-cost, typically used by Cloud-based epos providers, many will charge an initial upfront cost for hardware, set-up, configuration and even installation, but it is far lower than if purchasing in full at the outset, followed by a fixed-monthly payment for the balance of the initial costs, support, cloud-hosting etc.

Or find an Epos dealer and Merchant Services provider who have the right balanced solution for you, that is affordable now and, in the future, when things are back to normal, or as normal as it will ever get.

Unless, your business is very small or mostly cash transactions, always opt for a Merchant Provider contract as likely to pay less in fees, typically less than £2,500 to £3,000 per month or double or treble that, if taking into account a free Epos too, if it is up to the task and has all the features and functionality you need as well as the benefit of not being tied into a long-term agreement and potential cancellation fees.

EPoS

Call 01243 855700 to speak to our EPoS specialists.

Leave a Reply

Your email address will not be published. Required fields are marked *