WILLARD FOXTON IS AN INVESTIGATIVE JOURNALIST & TELEVISION PRODUCER. HE WRITES ON SKULDUGGERY WHEREVER HE FINDS IT, ESPECIALLY IN THE WORLD OF TECHNOLOGY.
It looks good – but will he accept a card?
It’s happened to me three times in the last fortnight – once, when buying my girlfriend flowers, once when getting home from an airport in a taxi, and once when staggering home and trying to buy a kebab near Victoria station. A small business person has turned to me, a potential paying customer, and said: “I’m sorry, mate, I don’t take cards”. On every occasion, I’ve walked off and found a different place to buy the service.
I’m sure this sort of thing happens hundreds of times a day, and finally someone has produced the data. Sage Pay have published a survey of consumers, suggesting that 64 per cent of us prefer to pay by card, and one third of people will return an item to the shelf if they can’t pay by plastic.
Chatting to small business people, I find that it’s not that they don’t want to take cards – it’s that having a card machine is frustrating and expensive. As ever, our useless, bloated high street banks are to blame.
They just don’t want to deal with the hassle of giving small businesses card machines. They charge a fortune – as much as 10 per cent of all transactions – for the merchant accounts card payments require, as well as insisting on rental contracts for the card terminals, and long lock-in periods that tie you to that bank. The money can take ages to come through – especially over holiday periods. This is a throwback to the days of clunk-click card machines with carbon paper, when card processing was an expensive business. With everything being electronic, the costs for the banks have plummeted, but short-sighted senior managers don’t want to get rid of a nice little earner.
The stranglehold our big banks have on the country is never more clear than in situations like this, where they have no incentive to improve service, so don’t use new technology until they are forced to. Even some Third World countries are ahead of us, enabling you to pay with your phone, using innovative systems like M-PESA. (In Kenya, you can evenbribe corrupt policemen electronically.)
Fortunately, that sort of technology is finally arriving and bringing in some competition. Already, small businesses can cut out the bank middleman with dongle-based smartphone based systems like Square and Izettle. Square is even offering a service in the US where you can just email money to a vendor or a friend, using nothing but a smartphone app.
While these newcomers can themselves be expensive and might not work with all banks, more traditional payment providers like Sage Pay are upping their game by offering fixed fees on transactions and new technology such as mobile card machines and contactless payments.
So the technology exists – and it’s about time florists, kebab shops and taxis started to use it.