Do you take plastic? Of course you do
You’d probably have to go as far as Germany to find a forecourt that doesn’t accept cards although I haven’t been to Germany lately so I don’t know if their ’cash only’ policies still apply.
Now, how closely do you examine your statements? Notice all the little extras? Percentage charges, PCI compliance, fees here, fees there? They look quite small: one or two per cent here, just 30 quid there; but add them all up and what have you got left? In some cases, zilch because your margin is gone, gone, gone My journey down this plastic road started with a call from Chris Clark, from one of the most remote bits of the UK.
Rousay is a tiny island less than two miles north of Orkney’s mainland, off the north coast of Scotland. Chris and his wife Marion run Marion’s Shop and Filling Station and they know every last one of their 80 core customers.
Since the place is nicknamed the Egypt of the north, owing to its archaeological diversity, it attracts a lot of visitors in the summer. So, as you can appreciate, their trading pattern is somewhat skewed.
Chris told me that they had just received a letter from Streamline telling them that their costs, previously variable depending on which transactions they were doing (they only do debit cards and cashback), would now be a percentage of the total.
They don’t seem to have told them what that percentage is and now they have to decide whether to accept the terms or not.
Their current bill (for February, a bleak month everywhere) was nearly £90 for 173 transactions, rental, compliance, fees various, etc.
Chris asked me where he could get a cheaper package this was impossible to say as we don’t know what he will be charged if they accept the new terms! He had already consulted his bank, which suggested Cardnet but he didn’t fancy this because of its termination fees.
I did suggest that he contact the Association of Convenience Stores to see whether they offer group deals so that the cost of joining would be offset by the various savings. Chris has a friend who runs a hardware store and he gets a 40% reduction in Streamline costs by buying through his membership of his association.
I also wondered whether he couldn’t just deal in cash but there is no bank on the island and when the Post Office’s cash machine is down, it is down to Chris and Marion to fill the gap.
And although they don’t take credit cards, they do give credit when people need a bit to tide them over.
(Writing this from my London base, it almost feels as though I am reporting on another planet: all the stores I know sport signs saying something like ’Please do not ask for credit as refusal may offend’.)
Obviously Chris and Marion only offer credit to the 80 customers they know they’re not daft.
The couple have until May to decide whether to switch suppliers. Who knows, the new method may prove to be cheaper but yeah, we all know it won’t be, will it?
Meanwhile, it would be very helpful if anyone out there can recommend a good alternative.
Crystal ball gazing
I’ve just read that the first electric car races are to be held at, among other places, the Olympic park in East London. These zero emission cars can go to up to 180mph. That’ll be a short race then, I thought. But they’ve thought of that too.
Races will last an hour with drivers swapping cars after 20 minutes, then going back to their original car after 40 minutes when it has been charged, for a final 10-minute burst.
This led me to thinking about the future. It is reckoned that the next decade will see the smartphone take over in previously unheard of ways, such as paying for petrol.
What about the batteries though? Since these phones do everything except make the beds, they need a lot of recharging.
I suppose if the owners are out to buy petrol they will recharge them in their cars en route.
But I wonder when I’ll get the first helpline call from someone whose customer can’t pay because their phone’s just gone dead?
Would you credit it?
Researching the card story led me to discover that RMI Petrol is doing its own research into the rising cost of card transactions in general.
A conversation with its chairman Brian Madderson further led me to Barrie Richards, who runs the father-and-son business St Blazey Service Station near St Austell in Cornwall. Barrie is an executive committee member of RMI Petrol and is fronting research into the subject.
"We are investigating the high cost to the industry of fuel, corporate and premium cards, with the intention of seeing how we can gain industry support to avoid our margin disappearing into card commission charges."
These so-called premium cards are interesting in that they reward customers (ie consumers) with cashback and discounts which can leave retailers paying 2% rather than 1% for a standard credit card transaction. Furthermore, there is no audit trail as such so the industry has to rely on what the card companies say the cost is.
Seems to me that the more one looks into these financial services (and that’s ALL of them) the murkier the waters get. Too many tiers/layers/platforms!