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etailers continue to pay high charges for accepting card payments as a result of both lofty processing rates and the additional costs such as charge-backs and write-offs that frequently occur, writes Glynn Davies of exclusively for Retail Technology. James Hallewell, founder of the

Card Processing Advisory Service (CPRAS), recently suggested that changing merchant service provider could save a retailer up to 40% in processing charges. He cited one retailer with

annual sales of £160 million that was paying card fees of £500,000 per year, which CPRAS helped reduce to £200,000. Hallewell said part of the problem is that, “if you go out looking for the best price, then the acquirer banks quote in a different fashion, so it’s difficult to get like-for-like comparisons, which means it is not very transparent”. Scott Thomson, director of

payments consultancy QPQ and lingerie retailer Pour Moi, also maintains additional charges can be even more onerous than the rates charged on the different card types.


“The lowest rate does not mean the lowest cost,” explained Thomson. “Retailers must consider carefully all the services offered by their acquirer, as well as the sophistication of their own administration systems. Without the necessary monitoring of transactions, then any benefit of lower rates may be totally absorbed by the cost of charge- backs, write offs and the handling of customer queries.” The issue of charges is arguably more acute for smaller operators, as Thomson said they pay on average 100% to 300% more than the larger chains: “One would expect some differentiation but in these days of electronic transactions the cost differential amounts to profiteering on a gigantic scale.” Robert Jarrett, professional

services and membership director at the British Independent Retailers Association (BIRA), said there is another more onerous card payments problem emerging that is adversely affecting all sizes of merchant. It involves the proliferation of ‘premium’ cards, where 20

years ago, there were only two rates of ‘interchange’ - the charge administered between banks for accepting card-based transactions – on plain vanilla Visa and MasterCard cards.Today there are now more than 200 card derivatives. “These premium cards have broadened the concerns [over payment charges] for all retailers. Although obviously the larger merchants can deal with it better,” Jarrett suggested. But he also pointed to some positive changes on the horizon for the retail sector. On 24 May MasterCard appealed against a European Commission judgement that cross-border interchange was anti-competitive. After losing this appeal it has again appealed (for a final time) against the latter decision. Jarrett said that, ahead of any

outcome, “the Treasury is waking up to the situation in terms of domestic charges”. He added: “It [the EU court case] has been going on for 15 years and we are coming to the situation where Europe will legislate.”

u After a successful trial, DFS is now rolling out the latest Giant iTab touchscreen system from Touch2view to a select number of stores across the UK, providing app and e-commerce interactivity and customer engagement for multichannel selling instore. “We feel that the Giant iTab significantly evolves our kiosk experience to the next level,” said Russell Harte, DFS head of multichannel development and delivery.


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