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eMoney News

Small businesses losing out with chip and pin
9 Apr 2010

Contactless smart cards could be the technological saviour that small businesses are looking for as they are being hit with huge bank charges to use chip and pin machines.

Banks have abolished cheque guarantee cards. As a result, small businesses will inevitably see the use of debit or credit cards in their stores increase or run the risk of cheques bouncing, thisismoney.co.uk reports.

The charges that banks make on chip and pin transactions are significantly higher than the costs charged by ePayment facilitators such as sQuid, which allows retailers to operate with prepaid eMoney schemes using contactless smart cards. The costs are lower as they operate outside of the traditional banking system, using an end to end solution delivered over the internet.

The Federation of Small Businesses' Stephen Alambritis told the financial website that the organisation's members were concerned.

"We're very angry about the fact we have been completely ignored and banks have ridden roughshod over us," he said.

"This is all about the banks saving money. It goes to the core of the small business community."

Up to three per cent of the value of each transaction can be charged for credit card use while there is a flat charge of as much as 50p per payment on debit cards.

On top of this, businesses must often pay a monthly rate of £35 for the mobile card reader itself.

Contactless smart card technology can cut down on these charges significantly, ultimately improving small businesses' margins and allowing them to pass on cost savings to the consumer.