Carpet cleaners, window cleaners, gardeners and operators in other trades working individually or with small companies traditionally have not accepted payment cards because of the costs involved. Acceptacard Ltd. is hoping to resolve the expense dilemma, at least in the United Kingdom.
The London-based company announced March 27 it is offering its Payatrader.com subsidiary’s service to UK trade merchants as a relatively low-cost, online card-acceptance option.
For an initial £99 (US $157) fee, trade merchants using Payatrader can accept card payments immediately without the need for a traditional terminal or separate merchant account, Bill Thomson, Payatrader managing director and co-founder, tells PaymentsSource.
Merchants pay no monthly or recurring fees, and they only pay when they use the service. Payatrader charges 2.3% to 2.95% of the sale for MasterCard and Visa transactions based on weekly volume, and 2.95% for American Express transactions.
“Small traders do not need a separate merchant-services account with Payatrader, making it simple to set up,” Thomson says.
In addition, Payatrader alleviates busy merchants’ worries about a personal check payment possibly bouncing, and the service helps reduce merchant trips to the bank to cash checks, he adds.
Merchants join Payatrader by filling out a Payatrader.com application form online. Payatrader provides accepted merchants with a membership card, which the merchant shows to customers to confirm association with Payatrader, along with a payment-request sheet listing payment options. Customer may pay online from the merchant’s website or from Payatrader.com, pay by calling the Payatrader payments center and providing the payment details, or send the payment details via email after requesting that option, Thomson explains.
After the customer completes the transaction, Payatrader sends confirmation notes to both the customer and the trader via email, text message or mail, the company website notes.
Payatrader’s payments gateway accepts all MasterCard Worldwide, Visa Inc. and American Express Co. cards, including Maestro, Solo and Visa Electron cards.
Because the payments industry often views home-service providers and the traders market in the UK as underserved, it “often quotes it as an example target market” for new payments innovations, Zil Bareisis, a London-based senior analyst for research firm Celent, tells PaymentsSource.
“It’s good to see an actual live service aimed at that market, but the competition is heating up for person-to-person payments options,” Bareisis adds.
Barclays Bank PLC has entered the market with the development of Pingit, Baresis says (
Pingit links a Barclays customer’s account with his mobile-phone number, allowing the individual to transfer funds by typing in the recipient’s mobile number. Customers protect the funds transfer with a five-digit passcode, allowing funds to move directly from the sender bank account to the receiver bank account.
The Web-based or mobile services help small merchants in the UK because card readers that attach to mobile phones from companies such as Square Inc. in the United States are not an option, Bareisis says. Those devices are designed to work with magnetic stripe cards, not the EMV smart cards more common in Europe, he adds.
Monthly credit card processing fees represent a barrier for small merchants with a relatively low transaction volume, Bareisis says.
Yet monthly fees are not the only barriers for small merchants, he suggests.
“Suddenly paying per transaction is a big mental barrier to overcome for these merchants, as well as how quickly they get their money because it takes about 10 days to settle a transaction with Payatrader,” Bareisis contends.
In addition, “it is no secret” that small merchants often quote their customers a discount if they pay in cash, he says.
Still, any process that can help the traders market migrate away from cash and check use is welcome, Bareisis adds.
“It will be interesting to see how quickly Payatrader can get a critical mass of merchants and consumers,” Bareisis says.
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