ONLINE businesses are calling out the “hidden” transaction fees they encounter.
A study of 500 businesses which sell on the web found they are being hit by fees of approximately 3% from traditional payment processing firms for each transaction.
1
Given the unprecedented challenges faced by businesses currently, 45% said this is too much.
And 67% claimed these types of fees take the joy out of running their business.
It also emerged 88% believe it would have a positive impact on their business if these types of payment processing costs did not exist, with 45% claiming it would have a significant impact.
The findings form part of a report by Super Payments, the world’s first payment provider to offer free payments to e-commerce businesses, to explore the impact and understanding of payment processing costs.
One business which has been impacted by high fees is Little Green Radicals, which was founded 18 years ago and makes children’s clothing with a focus on sustainability and fair trade.
While the business continued to grow, despite the challenges of the last few years, founder, Nick Pecorelli, was increasingly focused on where the business could make greater savings.
He said: “We pay, on average, 2.9% per transaction, which as a small business is a lot.
“I kept asking myself, why are we paying these high transaction fees-there must be an alternative.
Most read in Business
“When I heard about Super Payments, I leapt on the idea because the savings I make mean I can offer customers a cash reward on every purchase they make.”
A separate study of 2,000 adults, also commissioned by the payment provider, found 43% had no idea payment fees running up to 5% of the purchase price were being added to the cost of items.
And 37% have sympathy for online retailers because of the “behind the scenes” costs they encounter.
While 45% of shoppers polled, via OnePoll, would shop more if these fees did not exist and retailers did not need to pass them on, hiking the cost of a transaction.
Samir Desai, founder and chief executive officer of Super Payments, said: “For too long, both businesses and shoppers have been stung by high payment fees, in many cases without even knowing it.
“At a time of high inflation and increases in the cost of living we believe payments on the internet should be free.”
Do you have a money problem that needs sorting? Get in touch by emailing [email protected].
You can also join our new Sun Money Facebook group to share stories and tips and engage with the consumer team and other group members.
