Accepting card payments is an essential part of running a modern business. Whether you operate a restaurant, manage a hair salon, run a retail shop or provide services on the move, customers increasingly expect convenient ways to pay.
But while most business owners understand the importance of accepting card payments, far fewer regularly review what those transactions are actually costing them.
Card processing fees can be surprisingly difficult to understand. Between transaction charges, terminal rental, authorisation fees and other potential costs, it isn’t always obvious whether your current arrangement represents good value.
And when your payment terminals are working perfectly well, there’s often little incentive to question the agreement.
The problem is that an arrangement that made commercial sense several years ago might not be the most competitive option today.
Here are five signs that it could be time to take another look.
1. You’ve been with the same payment provider for years
Loyalty can be valuable in business, but remaining with the same payment provider indefinitely doesn’t necessarily mean you’re receiving the best available rates.
Card processing arrangements can change over time. Your business might now process significantly more transactions than it did when you originally signed up, or your mix of card types and transaction values may have changed.
Yet your pricing might still reflect the circumstances of your original agreement.
If you haven’t reviewed your merchant services for several years, it’s worth asking whether your existing terms still reflect the way your business operates.
A useful starting point: Find your most recent merchant statement and compare the total fees you’re paying against the value of transactions processed.
2. You don’t know your actual processing rate
Many payment providers advertise attractive headline transaction rates.
However, the advertised percentage doesn’t always tell the complete story.
Depending on your provider and pricing structure, your statement may include a combination of percentage-based processing fees, fixed transaction charges, terminal rental, authorisation fees and other service charges.
These costs can make your effective processing rate higher than the headline figure suggests.
One useful measure is your blended processing rate.
This is calculated by dividing your total relevant card processing charges by the total value of card transactions processed over the same period, then multiplying by 100.
For example, if a business processes £20,000 in card payments during a month and pays £300 in relevant processing charges, its blended rate is 1.5%.
Understanding this figure can make it easier to compare providers on a more meaningful basis.
Just make sure you’re comparing equivalent costs. Terminal rental and other fixed charges should be considered separately or included consistently when comparing total payment acceptance costs.
3. Your business has grown, but your agreement hasn’t changed
The payment arrangement that worked when your business first opened might not be suitable several years later.
Perhaps your transaction volumes have increased. Maybe you’ve opened another location, started taking payments online or introduced additional services.
As businesses grow, their payment requirements often become more complex.
Higher transaction volumes may create opportunities to review commercial terms, while changes to the way customers pay could mean different equipment or technology would be more appropriate.
A growing restaurant, for example, may benefit from payment terminals that integrate with its wider systems.
A mobile tradesperson may place greater value on a SIM-enabled terminal that doesn’t depend on a separate phone connection.
The right solution should evolve alongside the business.
4. You’re paying for equipment or services you no longer need
It’s easy for recurring charges to become part of the background of running a business.
Terminal rental, additional devices, service packages and optional features can continue appearing on statements long after their original purpose has changed.
Perhaps you have more terminals than your business now requires. Maybe you’re paying for functionality that your team rarely uses.
Alternatively, your current equipment might be missing features that would genuinely improve how you operate.
Reviewing your payment arrangement shouldn’t simply involve comparing transaction rates.
It’s also an opportunity to understand exactly what you’re paying for and whether every part of the arrangement still delivers value.
5. You’re frustrated with your provider’s service or support
Cost matters, but it isn’t everything.
A payment terminal that regularly loses connectivity, a support team that’s difficult to reach or an unnecessarily complicated process for resolving issues can create real operational problems.
For a restaurant, payment disruption during a busy service can slow things down.
For a mobile business, unreliable connectivity can make accepting payment at a customer’s location unnecessarily difficult.
And for any business, spending hours trying to resolve a relatively straightforward issue is time that could be spent elsewhere.
If you’re regularly frustrated with your payment provider, that alone may be a good reason to explore alternatives.
A competitive rate is valuable, but so are dependable equipment, straightforward service and responsive support.
What difference could a review make?
The answer depends on your existing arrangement, transaction volumes and business requirements.
In one recent Voraty case study, a review of an independent hair salon’s merchant statement identified approximately £2,000 in potential annual card processing savings in just five minutes.
For another business, the benefit might be better technology, improved reliability or a more flexible way of accepting payments.
The important point is that you won’t necessarily know whether a better arrangement is available until you review what you currently have.
And that review doesn’t have to be complicated.
How to review your card payment costs
Start by gathering a recent merchant statement and checking the total value of card payments processed during the period.
Look at the charges applied, including any fixed fees, and consider how those costs compare with your transaction volumes.
Next, think about how well your current equipment supports the business.
Are transactions straightforward? Is connectivity reliable? Can you access the information you need? Do you receive help quickly when something goes wrong?
Finally, consider whether your existing agreement still reflects your business’s size, operating model and plans for the future.
When comparing alternatives, check the complete commercial terms, including contract length, minimum charges, terminal costs, potential exit fees and any additional services.
The cheapest headline rate isn’t always the best overall solution.
Better payments start with better information
At Voraty, we believe businesses should have a clear understanding of what they’re paying for and why.
We help businesses review existing card processing arrangements, identify potential savings and explore payment solutions suited to their day-to-day requirements.
Sometimes that means reducing unnecessary costs. Sometimes it means introducing better technology or improving the support available when something goes wrong.
Whatever the priority, the starting point is understanding the business.
If you haven’t reviewed your card processing costs recently, now could be a good time to find out whether your existing arrangement still offers the right value.
Better Payments. Better Business.
Speak to Voraty about reviewing your card payment arrangements.