David Lock

Anyone know a typical figure that major companies e.g. fuel retailers, big stores etc are charged to process credit card payments?

I paid my leccy bill by credit card and they wanted 1.5% extra "because that's what we are charged". But I don't believe they pay anything like that. I would guess something less than 1%. I phoned up Energy Watch who are supposed to protect consumers saying I suspected I was being lied to but they were useless!!

I run a low turnover mail order company and am charged 1.3% to process credit cards so if I can get that rate then Southern Electric need to change banks or own up to the truth. Comments?

dl aka Fed-up-with-being-taken-for-a-ride of Sussex

Coffin Dodger

Given I get 1% cash back on my Egg Money card I'd have thought it would be at least that otherwise Egg would be running at a loss?

urban

iTrader: (1)

There is a handling fee for companies who accept credit cards.
Some pass the charge onto the customer, others just hide it.
Look at some of the wording on a transaction next time.

We build the fee handling into our applications in work so customers can see truely what they getting from a customer and what goes to their bank for handling the card.

David Lock

Thanks. But I am a pedantic old sod

I don't mind too much them charging a fee which includes something for their time and effort as well. BUT they told me that it was just because that's the amount they were charged by the processing bank. And I don't believe them.

dl (fed-up with being patronised by these greedy companies)

I can't see anything on the bill that mentions this fee.

Zeon

I used to work for a credit card company. And I few of my colleagues used to work in the merchant services division i.e. those people responsible for the 'handling charges'.

If you shop at Tesco and pay on your card it usually says something like 2.5% of the total bill goes towards the handling charge but the cost to the customer remains the same. Basically Tesco pay the charge as most smaller companies can't afford to do the same so have to pass on the charge to the customer.

Edit:

To the original poster. When I was in the card industry, RBS used to handle all the merchant services for Tesco. RBS earned so much money from the handling charges that most of the banks would of kill to get the Tesco deal. We are talking millions of £!

David Lock

Yes BUT WHAT IS THE ACTUAL FEE PAID to the handling bank?

Tesco's won't pay anything like 2.5%. That's just another "Every Little Helps"............ Tescos

As I said I take cards for payment as a Merchant but I am a nobody in business terms - but I only pay 1.3% of the transaction amount so I just don't believe Southern Electric pay 1.5%.

dl

Zeon

What are you shouting for?

I'm only going off what I can remember. Like I stated Tesco pay a percentage of the value of every transaction.

My local football club charges a flat rate of £1.50 per transaction irrespective of the total value of the transaction.

From what you've posted it appears that you are in business yourself but not in the same league as Tesco or Southern Electric. The thing you have to remember is that the bigger the company the less the bank will charge them.

Hypothetically speaking if you make 1000 transactions a month and they charge you 1.3% and you get a better rate elsewhere the bank isn't really going to worry about it. If Tesco get a better rate elsewhere and they are taking 200 million transactions a month then it starts to matter. Hence why the gap between rates isn't as big as the gap between the size of the company.

Hope this helps

David Lock

Sorry - not shouting at you as such. Just frustration.

OK I get what you are saying but do you think a major utility that takes millions in credit card payments would be charged more than me (who is NOT in their league)?

The no brainer answer is No and I don't like being lied to! dl

Zeon

I totally agree with your frustration. These handling charges are just an extra little bit of cash that the banks and big business use to make more money.

Luan Pra bang

Depends on what cards. There is often a minimum payment fee and if it is amex they may be being charged up to 1.7 percent. a switch card is usually a 30 pence fee with percentages charged on credit cards with a minimum fifty pence per transaction. If it bothers you pay with a debit card.

farmer1

For merchants its usually around 1-2% of the transaction amount depenind on which card for credit cards. For debit cards its usually about 50p irrespective of amount.

David Lock

Most merchants pay a fixed agreed percentage which covers most credit cards except Amex and Diners. Most businesses, outside restaurants, hotels and shops that sell to American tourists, don't take Amex as they are too greedy.

As you say Debit cards are charged at a small flat fee per transaction at 30p upwards. dl