As the annual cost of accepting card payments soars for independent retailers, one industry association has launched a comparison shopping site to help its members slash the merchant fees paid to banks and payments service providers.
Retail Drinks Australia (RDA), an industry body representing packaged liquor retailers across the country, went live with the new platform at its member portal on Thursday.
The comparison site was developed in partnership with Sydney-based merchant services consultancy, Payments Consulting Network.
RDA chief executive Michael Waters said pilot testing of the site indicated liquor store operators could harvest annual savings of around 42 per cent on merchant fees by switching to alternate payments providers listed on the site.
“For an independently owned and operated retail liquor store, typical annual merchant service fees can be anywhere from $5,000 to a staggering $25,000 or more, depending on store size and turnover,” Waters said.
“These costs have steadily increased in recent years and today in most instances represent a “Top 5” annual cost of doing business, behind purchasing stock, wages, rent, electricity, or business insurance.
“Recent pilot testing of several small, medium and large member stores with average annual merchant fees of $10,122 identified an average annual fee saving of 42 per cent ($4,244) with the “best alternate” PSP, with savings ranging from 32 per cent to as high as 52 per cent.”
Merchant service providers listed on the RDA’s comparison shopping site include Suncorp and SmartPay.
Mangala Martinus, the managing director of Payments Consulting Network, said the merchant pricing embedded in the new comparison site had been customised for merchants in the packaged liquor retail industry.
“To deliver the service to the liquor retail sector, we partnered with RDA, and negotiated custom pricing from several reputable payment service providers (PSPs) - Suncorp, Live eftpos, Fiserv and SmartPay,” he said.
“We then leveraged the same fee savings calculator that we use for our larger retail clients to present the comparison analysis in a format that allows a small business to easily make an informed PSP selection decision.”
Martinus said the service had been designed with a view to simplifying the process of comparing the pricing and features of competing merchant plans.
“Comparing different pricing proposals can be complex due to the different transaction routing options and pricing structures available in the market,” he said.
“Our service cuts through the complexity by presenting detailed pricing comparison reports that quantify the annual projected fee savings.”
Martinus said his firm was in talks with other retail industry associations about developing bespoke platforms for their members.