Black Friday

Black Friday card payments: How your business can maximise profits

It’s that time of year again. Whether you love it or hate it, Black Friday looks here to stay.

Black Friday has well and truly invaded the British high street and looks set to become a permanent fixture on our retail calendar.

This year UK consumers have indicated a record planned spend of £7 billion on Black Friday/Cyber Monday.  That’s £220 per head for those planning on participating!

Search volume for “Black Friday” on Google has increased 79% from 2013 to 2017. (Google Trends data)

Depending on the services you offer, there’s a good chance you’ve already got your discounts in place and are preparing yourself for the increase in footfall the day brings.

Ahead of busy days like this, it’s always wise to ask yourself just how prepared you are, whether your business can cope, and if you’re really maximising the potential of the day.

When speaking to businesses, an area we can frequently improve is their card payment processes and contracts, specifically their charges for taking payments.  We get it, card payments procedures aren’t the most exciting thing for you to think about. However, this mentality is exactly why it’s an area in which so many UK businesses overspend.

So how do you know if you’re paying more than you need to? What kind of payment machine should you have? And does your business even need one at all?  Here, we’ll give you some food for thought.

You may not think you need a card machine, but your customers will think differently.

On a day like Black Friday, store discounts are a great way of enticing new customers to your business. With such opportunities in front of you, it’s imperative that you have a variety of payment options available to ensure the smoothest customer journey possible.

Despite the increase in footfall brought upon by Black Friday, many retailers can still miss out on business if they can’t accept card payments. You need look no further than a 2017 study that found around 3.4m people in the UK almost never used cash, instead relying solely on their cards.  The Guardian reported in February that just 40% of UK payments made in 2016 were cash and projected that to fall to 21% by 2026.

Despite this, at least three million small UK businesses still don’t accept card payments.

Card processing rates are variable, make sure you have the best rate for YOU.

If your business accepts credit cards, avoid unnecessary expenditure by shopping around to ensure you have the best rate possible. The difference between offers might seem minimal but over time, they can have a much larger impact, especially on days like Black Friday when you’re processing more transactions than usual.

Don’t make the mistake of assuming your bank will have the best deal available. The best starting point is to analyse your current accounts and expenditure; or get an expert to do it for you.  Many don’t charge for this service. If there are better rates out there, they’ll find them. Often, we’ll find that we can reduce our customers’ charges by as much as 40%, so scouring the market for better deals should be a top priority.

There are numerous merchant services available to you depending on your income.

There are two options available to you: a contracted terminal, or a Pay-As-You Go (PAYG) service. The one that’s best for you is dependent on the overall value of the payments you process.

Many smaller businesses (particularly microbusinesses) prefer to use a PAYG service. This is predominately down to the fact you have no fixed monthly fees. Once you’ve purchased the hardware, it’s yours to use as and when you need it. This differs from a contracted terminal which is normally a more expensive piece of equipment requiring a monthly fee to operate (usually around the £20 mark for a SME).

So PAYG is the cheaper option, right? Maybe not…

As we’ve already covered, you pay a fixed rate on every transaction you process through your terminal. What some businesses fail to realise is that contracted terminals come with a much lower fixed rate. Quite often, contracted terminals have a rate of 0.4%, compared to PAYG which averages around the 1.69% mark. So, if you’re a PAYG user, you’re paying an extra 1.29% on all those Black Friday sales.

Below, we’ve compared the overall monthly cost for two small businesses, one who processes £1,000 per month and another bringing in a more substantial £3,500.


As you’ll see, PAYG makes sense for smaller businesses with a lower turnover. But once you start generating more revenue it becomes apparent that a contracted terminal is the most cost-effective option.

Often, three- or four-months’ worth of revenue at a particularly busy time of year can outweigh quiet months of wasted rental fees, making a contract more attractive than PAYG over the long term.

Exiting your merchant services contract for a cheaper one can be a notoriously unpleasant experience.  Merchant contracts are purposefully restrictive, providing only short windows of opportunity for switching or cancelling in a 12 month period, as well as potential penalty fees.  It’s advisable to enlist the help of an expert who can negotiate on your behalf (cough, cough).

What next?

On a day that many businesses post some of their highest sales of the year, don’t let having the wrong (or none) card payments procedures hold you back and prevent your business from fulfilling its potential.

If you need any help on establishing what the best option is for you, our team of experts are on-hand to steer your business in the right direction. Simply give us a call on 0800 130 3514 or drop us an email and we’ll get back to you.

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