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Card payments: What's the catch?

Yesterday we ran a piece about accepting card payments as a small business and someone dropped us a line to ask if there were any downsides to doing so.

Beyond the fees that you often need to pay on transactions and occasionally on the device itself, there are a couple and so we thought we'd share what we learnt.

For a start, using these devices opens you up for increased liability for card fraud. If you are worried about how this might affect your business in particular, it is worth seeking professional advice and our brokers should be able to advise you if you are worried about it from an insurance point of view. Basically, you can be blamed for someone spending money on a stolen card with you, especially on the more available swipe-and-sign devices.

Also, on the subject of security, chip and pin solutions which have become the norm in most shops and businesses tend to cost more to process with these devices where they are even available.

You will also have noticed a common trend throughout yesterday's post was that Visa, one of the most popular card providers, is not always supported by these devices and when it is, there is often a more complicated way required to authorise payments. The background behind this is that the company has a slightly more rigorous security process in Europe but the end result for you is that it is more awkward for clients to pay using these cards.

Finally, payment processing in this manner is not instantaneous. Some of the devices may have you waiting around for a month before transactions make their way to you and sometimes how much you receive straight away is tiered and dependant on the card in question. All of the companies discussed yesterday handle these things ever so slightly differently, so make sure you are clear what you can expect before signing up for one so you don't inadvertently end up with a cash flow problem.


These devices do open up possibilities for you, but they definitely don’t solve all of your problems.

It is however worth re-iterating the closing remarks from yesterday's post - this is a very fast and growing market. Financial companies are constantly working on new ways that you can pay for things whilst taking a cut themselves and it is becoming a very lucrative market, so if there’s nothing here that you think is right for you, then you probably wont have to wait long for something better suited for you to become available.


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