Over 40% of small businesses feel they are paying too much for their card readers
Research by the AA shows that over 40% of small businesses feel they are paying too much for their card readers.
A recent survey of over 1000 SMEs shows that 40% feel short-changed by their service providers, with a quarter also complaining of hidden costs and unclear pricing for their terminals.
29% had actually complained to their payment processing firm about the cost of their card readers, which typically come from large companies such as Worldpay and Global Payments.
Rising & hidden costs
The rising costs of card readers, coupled with hidden expenses, pose significant challenges, particularly for small businesses. The upfront costs are increasing due to technological advancements, enhanced security features, and supply chain disruptions.
Card readers now often include sophisticated functionalities like contactless payments, advanced encryption, and fraud detection, driving up manufacturing and development expenses. Hidden costs also contribute to the financial burden; these include maintenance fees, software updates, transaction fees, and potential costs for compliance with evolving security standards.
Supply chain issues, such as semiconductor shortages and logistical challenges, further exacerbate the situation. These escalating and hidden costs strain business budgets, making it essential for companies to carefully assess the total cost of ownership when investing in card reader technology to ensure it aligns with their financial capabilities and operational needs.
Small businesses in a bind
Payment to these firms normally occurs in the form of fixed annual fees, though some business owners opt for pay-as-you go or monthly plans.
The director of AA Financial Services, David Searle, commented: “Small businesses are in a tie when it comes to card payments. Increasingly, the terminal is an essential piece of equipment that customers now expect, but a lack of choice, poor reliability, high costs and surprise add-ons lead, understandably, to mistrust and a reluctance to invest.”
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