An SME Guide to Accepting Card Payments

The way in which people shop has changed a lot over the last few years. Ten years ago, the majority of goods and services were paid for by cash payments. However, nowadays, almost 50% of all payments are made electronically or by card.

While we’re still a long way away from being a completely cashless society, we’re only likely to see the amount of online or card payments increase over the next few years. In actual fact, research has suggested that businesses who don’t accept card payments could actually be turning away more than half of their customers. This can have a huge impact on the success of their business.

This has led to a number of SMEs choosing to invest in card machines in order to provide their customers with the service they want. In the last year, we’ve seen a 12% rise in the number of UK SMEs introducing POS (point of sale) terminals into their businesses. If you’re an SME who doesn’t currently accept card payments, then keep reading below to find out why you should consider investing in this technology and how to go about it.

The Basics Behind Card Payments

• In order to accept card payments in your business, you will need to acquire a terminal. You will also need to find a service provider who offers you a great service at a reasonable price.
• When it comes to processing a transaction, three different organisations need to be involved. Each of these will expect to be paid a fee for their service. The organisations that need to be involved are:
• The scheme (Mastercard, Visa, etc.)
• The card issuer (the financial institution or bank, e.g. Barclaycard or Santander)
• The merchant service provider (they act as the middle man between you and the customer)

Choosing a good card machine service can be tricky, particularly if you don’t know what you’re looking for. Whether you’re looking to take credit or debit card payments, or you’re simply searching for a new provider, the UTP group is a great choice. UTP Group work alongside Barclaycard bank (one of the biggest Financial Institutions in the UK) to provide card machines for businesses in the UK. Knowing that they work alongside a reputable bank means that you are partnered with a business that will continue operating for many years to come.

While most merchant account transactions take up to 5 days to process, UTP group works hard to offer their customers Faster Processing. With this innovation they are able to process all transactions in a 24-hour period, and if needed, they can process transactions within an hour. This can greatly increase your business cash flow.

The Costs Involved

• When it comes to taking card payments, there are a number of fees you will need to consider. These include:
• The merchant service charge – you will have to pay a set amount of money each time you complete a card payment
• The payment gateway fees – you will have to pay a fee for any payments taken over the phone or online

Authorisation fees

There are two main types of charging structures operating in the UK. These include:

The actual cost per transaction – This is usually the cheapest option available to businesses but it’s usually only offered to larger companies. Businesses are expected to pay a certain amount depending on the type of transaction taking place, e.g. if the customer is present during the transaction, the fee is likely to be lower, while fees for a transaction completed online are likely to be higher.

A blended rate – this is usually offered to small or medium-sized businesses. A blended rate means that providers ask for a fixed percentage per transaction. While this may be easier to budget for, it’s likely to cost more money in the long term. Providers are more likely to make calculations in their favour, so don’t assume that this is the best option. Businesses who are high-risk are more likely to expect higher fees and less favourable terms and conditions. High-risk merchants are businesses who are likely to have higher incidents of fraud, e.g. the gambling or travel industry.

The Service

Of course, when it comes to finding a good provider, it’s not just the costs that you need to take into account. You also need to take into account the type of service they offer. Do they upgrade their terminals on a regular basis? How long does it take for a payment to be processed? What are their settlement terms? And do they have a UK based call centre available? You’ll want a service that chooses not to outsource their work to any external organisation. Their employees should be well trained, closely monitored, and experienced in the world of business.

The Risks

These days, over 50% of all payments are made electronically, with cheques now being seen as a thing of the past and cash payments usually only used in over the counter retail sales. Taking card payments is well-known for being riskier than taking cash payments. But there are a few simple things you can do to reduce the chances of problems occurring. Businesses need to make sure that they comply with the correct standards and regulations in order to keep their customers and their business safe. Here are some of our top tips to protect your business:

Make sure that your website is secure

• Make sure that your business complies with the Payment Card Industry Data Security Standards (PCI DSS). The expected requirements will depend on the type and size of business you own and who your card issuer is.
• Consider accepting PayPal and mobile payments. These payments add another layer of security to the process.
• When sending items in the post, make sure you send them with proof of delivery (POD) this will stop your business from being charged chargebacks.

Complete an annual safety audit

Considering the fact that plenty of sensitive data is gathered every day, all business owners have a responsibility to protect their customers from theft or potential data breaches. Complying to the correct standards (including the PCI DSS) will give your customers the reassurance that their card details are safe and secure in your hands. This may also mean that they are more likely to trust your business, which can help you to build a better reputation.

You’re Ready to Take Your First Payment

Once you’ve completed your research and found a service provider who is perfect for you and your business, then you’re ready to get started. Within a week, you’ll be able to join the other 1.4 million SMEs in the UK who don’t turn away 50% of their customers. As we head towards a cashless society, we’re likely to see more and more SMEs accepting card payments. Currently, up to two-thirds of all SMEs in the UK don’t accept card payments. Why is that you may ask? The simple answer is because most business owners don’t realise how simple it is to set up or how much it will benefit their business. Follow our advice above and you’ll be well on your way to improving your customer experience and increasing your sales.