I’ve been mystery shopping on behalf of a payment industry client. Together with an associate, we tried to get quotes for a full suite of card payments – merchant account, card machine rental and e-commerce gateway. Calling on behalf of two real businesses, a gastropub and a sports club, we spoke to five merchant acquirers and two ISO’s (independent sales organisations).
Here’s what we found.
- It’s not easy to get a quote. All seven providers have a web enquiry form. Five of them simply don’t respond to web enquiries.
- The lead to cash process is analogue. Despite the digitisation of the rest of the economy, payment companies want paper. We were asked for hard copies of company accounts, lists of directors, bank statements etc. One provider even asked for a list of all 600 members of the sports club. “The underwriters need this”, we were told. Really?
- SME sales leads are often handled by field sales. Despite the simple nature of our enquiries, four providers routed us to field sales reps because our small businesses crossed an internal threshold. Field sales reps proved hard to get hold of – they are often driving or meeting customers – and we had to chase one for THREE weeks to provide a quote.
- Few sales skills. Even though every provider insisted that we talk to someone (rather than fill in a web form), there were few, if any, sales skills in evidence. Nobody asked what job role we did, who the decision maker was or when a decision would be taken. Most sales reps were solely focused on getting hold of our existing card statement so that they could beat the price.
- It’s all about price but most providers were keen only to talk about the headline credit and debit rates. We had to push some of them to discover what hidden charges (such as PCI fees or refund charges) they levied. This doesn’t inspire trust.
- Prices are negotiated. We got better deals in four out of seven cases by pushing back and proposing reductions in items that we’d been quoted for more cheaply elsewhere.
- There is no common terminology for pricing. This means that it is very hard to compare quotes across providers. One provider even priced on an interchange++ basis, normally a corporate pricing technique that involves providing separate quotes for each of the three elements that make up the normal fee for processing cards. There’s no way an SME can make sense of this.
- Quotes are scruffy. When they did finally arrive, quotes were normally cut and pasted into free text emails rather than presented nicely as HTML’s.
- Propositions are largely undifferentiated. We encountered few attempts at differentiation other than price . Only one provider proactively mentioned DCC (dynamic currency conversion) even though our two businesses were based in Central London. Another helpfully mentioned they had recently launched some other retail technology we could pilot.
- E-commerce is not joined up. One provider that advertises its omni-channel capability, obliged us to call two different offices to get quotes for card machines and an e-commerce gateway. Another said its e-commerce gateway wasn’t very good and we should use whichever one was recommended by our web developer.
- M-POS is available but not proactively sold to SME’s. The majority of providers had an M-POS product but not sold in a bundle with standard card machines and a merchant account to SME’s. As I’ve written before, this is a missed opportunity.
- Documentation is often poorly presented and difficult to understand. One provider dropped 8 meg of PDF’s in our inbox following our call. Another sent us FOUR separate emails, each containing important but linked information.
- Nobody offers online sign-up. The best was one ISO that said we could fill in the application form on the phone as an “assisted call”.
- It pays to shop around. We were quoted:
- From £12 to £21/month for portable card machines
- From 0.99% to 1.6% for Mastercard Credit
- From 12p to 22p for Visa Debit
- From zero to 4p for authorisations
- Retention offers are generous. The best financial offer for both pub and sportsclub were in retention calls to their existing provider. It proactively dropped prices by 20% and kept the business.
SME payment services are simple products that could be bought and sold online just like a business mobile phone service. Instead, the industry runs a significant overhead in with a people-intensive, paper-heavy sales process that serves neither its nor its customers’ best interests. There will be a big prize for the provider that cracks digital first and shares the benefits with SME’s.