Complex charges are putting businesses at a loss when it comes to choosing the right merchant service provider, and in many cases, companies are paying far higher rates than necessary by opting for their existing bank, according to the Card Processing Advisory Service (CPRAS).
Independent cost reduction specialist company CPRAS works with organisations that accept credit card payments and has found significant overcharging for a high percentage of merchants with card turnovers ranging from £50,000 a year to £200m a year.
Graham Hallewell, founder of CPRAS said: “The rates businesses pay for processing card payments can vary enormously and it’s nothing to do with the industry they are in or the value of transactions they process. Lots of factors contribute to the rates that are charged.”
According to CPRAS, 81% of businesses are paying their bank more than 10% too much for processing credit and debit card transactions, and many are paying nearly twice as much as they need to. Further evidence from the company has shown rates for similar businesses (same industry and similar turnover) can differ by more than 100%.
In a bid to help businesses large and small, CPRAS has consulted the Minister of State, Oliver Letwin MP, to support the company in conducting a transparency audit to look at the rates charged to small and medium sized businesses and public bodies.
“When the pressure is on public bodies and local councils to make huge savings, and help is needed to get start-up businesses to survive their first few years of trading, it’s imperative that merchant providers’ charges are reviewed. We are offering to conduct a free transparency audit to 1,000 UK businesses (with turnovers of up to £200m) and public sector bodies to identify the huge savings that can be made through a professional evaluation of the rates charged and renegotiating those rates on the company’s behalf,” said Hallewell.
Mr Letwin commented: “Businesses in the UK benefit from an environment where the cost of doing business is very low compared to other countries. Low card processing costs are extremely important as they not only support consumer focused businesses, but also because they help to keep prices affordable for us all. I welcome any initiative which supports British business and I look forward to seeing the results of the CPRAS transparency audit.”
CPRAS is inviting companies wishing to take part in the transparency audit or require further information about their merchant provider’s charges to contact CPRAS on 0844 3350331 or visit the website www.cpras.org.