Payments

Accept Cards Tomorrow. 

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Why is the pricing so complex?

1. Card people negotiate. You can sometimes twist their arm to get the best rate. (We have a professional arm-twister working here.)

2. “Percent Plus” formats. 1.2% + 30p might be cheaper than 1.6% depending on your average transaction size.

3. They all give better rates to bigger stores. The key thing you’re looking at here is (card) turnover.

4. They all price their hardware differently. You need a card reader to accept cards, and you might need theirs.

5. Some providers charge different rates for different cards. Others provide a flat rate and absorb those differences.

6. Some processors make you sign contracts. The longer you promise to use them, the cheaper rates they’ll give. You may need to buy out of a contract if you’re considering switching.

7. Some of them charge minimum fees. This is when they charge you for not using them.

8. Processing is tied to other decisions with their own costs. Want your card payments to enter automatically into your back office? Well, you’ll need EPOS software which is integrated with your payment processor. If you’re setting up a shop, we strongly recommend starting with EPOS and coming to payments second.

 

How does StoreKit help?

We started by selling hardware. But we could see our customers weren’t always (or even often) making the cheapest payment choices. Now, we make free payment recommendations by doing the calculations on your behalf.

StoreKit also has the advantage of “bulk power” where we can negotiate cheaper rates than a single shopkeeper could – so we can sometimes find a cheaper rate than the kind you find advertised.

I want to properly figure this out.

Let’s start simple.

You see that table to the right, there? That’s the point-of-sale stack.

In hot pink in the middle there is payment processing. Payment processing means accepting cards, and getting all the money from their bank into yours. And unlike EPOS software, processing payment is the same whichever way you look at it.

That means it’s a commodity because assuming everything works, it’s the same service at different prices. But it’s a long journey from a customer’s wallet to your bank account, and everybody is trying to find a way to muscle their way in and shave off a tiny sliver per transaction.

Money goes through their bank, a card network, a merchant bank, sometimes a payment facilitator  – and there are parties like independent sales organisations who don’t touch the money but are still somehow involved. Then, you’ve got your peer-to-peer payment methods like PayPal and totally different payment structures from Chinese technology giants like WeChat or Alipay, which we might see more of soon. This is without even touching e-commerce, which has its own regulatory procedures, players, and fee structuring.

Let me be clear: this is a rabbit hole. But if you want to get into the nuts and bolts of this, we’ve tried to make it accessible. You can find some starter resources below. 

 

 

EPOS SOFTWARE

Billed monthly or annually

PAYMENT
PROCESSING

Billed per transaction

HARDWARE

Rented or bought

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