New Credit Card Surcharging Service Comes at a Cost – But Not for the Merchant
The electronic payments sector is due for a shakeup with the launch of a new service for merchants that puts EFTPOS terminal rental costs firmly where they should be - onto the consumer. Using clever thinking, smart software and a supportive bank, new company Integrated Payments Limited (iPayments) has created a service that automatically surcharges consumers for credit transactions – the first such service in New Zealand.
The result is a rent-free EFTPOS terminal for the merchant, with credit card surcharge fees not only paying for the terminal, but once a threshold is reached, actually returning additional profits to the merchant.
iPayments was formed last month by members of the Ryan family, Paul and Peter Ryan, founders of EFTPOS Helpdesk Limited. They have more than 20 years of electronic transaction experience behind them. This month they were joined by Australian My ATM Holdings (ASX: MYA) through its wholly-owned subsidiary MY EFTPOS Limited acquiring 30% of Integrated Payments Limited.
General Manager for iPayments, John Hodgson says that the service solves a number of problems, not least of which is giving a merchant immediate access to a ‘free’ terminal and the ability to accept credit cards.
“Many merchants do not accept credit cards because of cost, negating many potential sales,” says Hodgson. “The iPayments system not only removes that disincentive, but in fact provides a benefit to merchants that accept credit cards.
“Consumers will need to get used to paying a surcharge on credit transactions – but this is something that is now commonplace, globally. The costs are more than balanced by the convenience of having credit availability in all kinds of retail environments,” he said.
The way the system works is that iPayments surcharges every credit transaction (for example, $2.00 or 2.00%, whichever is greater), including GST. Provided the merchant does at least two credit transactions per day for fixed line terminals (about 60 per month), or three per day for mobile GPRS terminals, the terminal is essentially rent-free for the merchant, saving them around $60 per month.
Use of EFTPOS and debit card transactions will not be charged by the service, only credit transactions will be surcharged. The only variation to this rule is with taxis, home delivery, mobile services and pizza delivery using mobile terminals which can charge a service fee on all transactions.
The merchant won’t notice any difference in the actual settlement of the transaction. Settlement for the purchase happens overnight as normal, and iPayments extracts its share of the surcharge during the standard overnight bank settlement process.
In terms of security, iPayments terminals, both fixed line and GPRS are to the highest standard of security and fully compliant with the latest standards required by banks in New Zealand. New security standards EFTPOS terminals came into effect on 1st June.
“The new service puts safe, compliant electronic transaction terminals in the hands of all merchants,” says Hodgson. “Not only can they now offer credit, attracting additional consumers, but can also do so without using insecure zip-zap machines or telephone credit card processing that exposes both parties to potential fraud.”
Says Hodgson “Whereas in the past credit card consumers have been partially subsidised by EFTPOS consumers, now iPayments surcharging puts the transaction cost where it rightly lies – with the credit card user.”
Integrated Payments Limited has its operational team in place and is currently hiring sales staff in Auckland, with the first iPayments terminals being installed from the 15th June.
www.ipayments.co.nz
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For more information, contact:
John Hodgson: General Manager for Integrated Payments Limited; +64 (0)21 851 580; John.Hodgson@iPayments.co.nz
Paul Blomfield; Public Relations Consultant; +64 (0)21 970 871; paul@paulblomfield.com
About Integrated Payments Limited.
Integrated Payments Limited was registered as a company in New Zealand in May 2011, trading as iPayments. The company is an innovator in electronic payments systems and has pioneered a surcharging system for merchants in New Zealand. The company is 30 per cent owned by Australian company My ATM Holdings (ASX: MYA) through its wholly-owned subsidiary MY EFTPOS Limited. See: www.ipayments.co.nz