[Closed] Contactless Charge To Retailer

New accounts, around 2.5 to 3.5% for credit cards, 2%-ish (a point or 2 either side) for debit cards. Sometimes it's a flat £1.xx per debit card transaction which can make the coffee shop margin look a little sickly on single drink purchase.

EDIT Amex and Diners are robbing at 5 to 8%

"New accounts, around 2.5 to 3.5% for credit cards, 2%-ish (a point or 2 either side) for debit cards. Sometimes it's a flat £1.xx per debit card transaction which can make the coffee shop margin look a little sickly on single drink purchase."

Thanks muchly. The flat debit card fee is the issue that concerns me. I do a lot of small transactions and I have a nasty suspicion I'm not doing vendors any favours. Looks like in some cases my fears are grounded.

Thanks muchly. The flat debit card fee is the issue that concerns me. I do a lot of small transactions and I have a nasty suspicion I'm not doing vendors any favours. Looks like in some cases my fears are grounded.

A lot of small businesses near me have a minimum spend or a 50p additional charge for that reason, I'd assume those that don't can cope.

That said it is a scandalous amount, it should be £0.00.5 per transaction as it doesn't cost the banks anything to process relatively speaking.

Do they give retailers free chip and pin devices? It it to cover the cost of the hardware and software security updates I wonder? It's not very transparent so I can only assume the banks are doing nicely out of it.

It really depends on what sort of deals they are on and how much they take on cards overall. We pay between 0.15% and 0.25% of the total of each transaction so it's peanuts also our banking charges are £1 per £100 banked so cash is a massive inconvenience to our business so we get rid of it as cash back and into our ATM to get rid of it again so we bank virtually nothing in cash.

One of my pet hates is being charged to pay by card however there are some really really poor deals out there and people get caught out signing contracts.

Sandwich's figures sound very high.

Barclaycard Merchant Services have a couple of options including 1% for everything (ex AmEx I presume), or a slightly more complex debit/credit split which still is nothing like 3%. That's based on a comparatively modest turnover.

One shop I've been in said no change for contactless but debit and credit card chip and pin does still cost them. No idea of that's a temprary offer as I'd also heard the equipment costs them.

Based on a straw poll of two. So hardly conclusive.

Depends - used to be mainly debit cards were charged a flat fee. I can recall paying probably about 11p up to 30p or so. Moved to percentage charges now mainly like credit cards, I think we're paying about 1.18% or something. Cheaper than paying cash into the bank (if you're paying into a business account that is)

Don't forget that counting up money and taking it to the bank also costs time and effort, and money if you are paying employees to do it. I've heard that retailers don't mind paying the extra cos of this, but I cannot confirm that.

Under EU pressure, Visa and MasterCard dropped their interchange rate (the rate paid to to card issuing bank) dramatically in [url= https://www.adyen.com/blog/all-you-need-to-know-about-the-eu-interchange-cap ]2015 [/url]. That's why cashback Visa and MasterCard credit cards disappeared.

What's left is the merchant service fee and the scheme processing fee. Both are very low. The merchant service fee is the part that varies on business size - there's less cost in signing one deal with Tesco than 100,000 with small businesses.

The schemes have also moved away per transaction fee cap for debit - it got a bit ludicrous when merchants were being charged the same for selling a 50p packet of crisps and a £50,000 car.

Amex were originally not covered by the EU ruling due to small market share but are now included.

@nickdavies figures look about right.

Whilst contactless used to get a very good rate to drive adoption it's now coming into line with contact cards.

Contactless used to be a lot cheaper it's now the same as putting your number in.
The rates went down recently but they invented a 4p charge on top of every transaction.
It either costs a pound or 50p to do a refund and I think it's a pound if you do it old school with one of those clunk machines.
edit... debit cards are 0.35% or 0.7% plus the aforementioned 4p charge. We do have a very good deal.
Then you have to rent the machine off them and have a PCI licence, if you don't they charge you extra.

Apologies I was quoting from my own experience in holidays where we have one of the best rates available to us. The pottery downstairs is getting turned over for 3.5%(!).
The machine we use has a £10 a month rental fee. Top tip make sure the card machine runs through your network to avoid blocking your phone line and vice versa. (They appear to run on a VPN tunnel of some sort).

Thanks everyone!