Friday, 1 December 2017

Payment Services Regulations 2017

Some interesting changes on 18th Jan 2018...

All those pesky charges for making card payments are finally going away. You will not be allowed to charge a customer any extra for paying by card.

This will have some interesting effects, many little shops that charge 50p or whatever, or charge 50p if paying below £10, will no longer be allowed to do so. This means, if they now have fees, they may decide simply to not take cards when below £10 or some such. In some ways that is a backwards step.

That said, merchant agreements (which are simply a contract between merchant and card handling company) may not allow that. That is not so easy for a third party (you wanting to buy something for £3 on a card) to effectively "enforce" on them, unlike the law covering the extra fee.

Anyway, how will A&A be affected by this...

Cheques

We accept cheques, and charge an admin fee. Cheques are outside these new rules, but for consumers we have very limited scope to charge for the extra time and hassle of staff taking a cheque to the bank. So the plan is no cheques from consumers. Businesses that insist on cheques (which is like half a dozen a month or something) will continue to be charged a £5 admin fee. Yes, we have people paying like £10 bill by cheque each month which means £5+VAT admin fee on top. I don't know what to say!

Given that no consumers actually pay by cheque, of have done for years, this will not be an issue, but does mean updating our terms.

Cards

We do take cards occasionally, as an emergency, and charge a fee.

The current plan is to stop taking cards at all.

This is not simply the cost of doing so. The fact we won't be able to charge those costs is just the last straw really. Card collections used to be really simple. We had it all automated. We rarely had any fraud. It worked well and we used for all our regular payments. Then PCI came along, and Barclays terminated our merchant account simply because I asked how "fines" for non compliance were valid in UK law. Not that we would not be compliant, but because I asked the question and they could not answer. Now we have a virtual card terminal (https) and merchant account via a different bank, and it is all manual, hence used rarely. There are costs, and the hassle of a stupid PCI compliance questionnaire that is technically impossible to complete honestly even if you wanted to. The advice from the bank is to just ignore the inconsistencies and stupidities in the questions! So yes, dropping cards is something I have been planning for a while.

But we need to replace that with something, and the plan is to find a way to get faster payments fed in to the accounts system in real time.

What I am trying to sort out is one of the newer banks, like Monzo (but they do not do business accounts) so we can get a live API for faster payments coming in. Yes, Starling is one we are looking at. Fingers crossed.

If we get that then we'll change the account to which people normally pay via BACS, and we'll record the exact date/time of payments on the accounts. At present we have terms avoiding the issue of people paying on a non banking day, but this will make the payment date/time clearer, and allow instant automatic clearing of account credit issues, even out of hours.

We may even be able to offer new services paid for on-line by faster payments and provided instantly.

Direct Debits

No change! We don't charge for paying us by DD. We do charge an admin fee for not paying us by DD (i.e. the payment bounces), which is allowed.

BACS

We accept BACS payments anyway, and do not charge extra for paying us. We charge an admin fee for incorrect payments (for us allocating payment if no reference), but that seems to be allowed, and wholly avoidable by using the right reference!


This could be interesting, and I'll keep you posted on developments.

8 comments:

  1. Have you tried Starling for Business Accounts? They are doing early access, I'm sure that someone wanting to make extensive API would be good for them too. - https://www.starlingbank.com/business-account/

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  2. But, but... if the cards are only an emergency, why not only take card payments for longer terms? The fee for a hundred quid or so of card transaction is hardly going to be crippling, like it would be for £10, is it?

    (But I've never been on the merchant side of this so perhaps I don't understand how annoying it is.)

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    Replies
    1. To be honest, taking cards at all is a pain and a cost and this is just the last straw.

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  3. Crypto? Ethereum contracts :)

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  4. I started taking card payments from customers 2 years ago, including AmEx cards. I did not think it would make much difference, but my cashflow has drastically improved. I think you should re-evaluate and take all cards, not just for one-off payments, but for routine payments.

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    Replies
    1. We used to, but to be honest, for the services we offer, Direct Debits make a lot more sense.

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