Our clients are our most foremost asset and providing them with the best service is what we strive to deliver. One way we do this is by not surcharging our cclient'spayments. We understand that our clients like using credit/EFTPOS cards so penalising them when they pay us, is annoying to tthem. So POS Solutions is a surcharge-free merchant, that means you are free to use your credit/EFTPOS when shopping with us without any extra fees.

Furthermore, continue benefit clients and will accept payments in the mode that our client is most comfortable with.

Our helpdesk is being hammered now as Telstra is suffering a major outage which appears to be Australia Wide and it is affecting both the internet and phones. We have been told that it will take them 24 hours to fix it.

As you can see from the map, it is Australia Wide.

What does appear to help is changing your DNS server to 8.8.8.8. This, however, will slow down your internet a little if you do not change it back, although there are some other advantages to doing this. Details on how to do this are available here.

As far as EFTPOS is concerned, if you can switch to 3G, you should be okay. Details on how to do this with Tyro are here.

Since now is the time of year, I have noticed many companies with shareholders come up with their best deals, as now is when they want figures. So here is a heads-up on what a very good deal is.

Tyro will announce an EOFY campaign. The offer is to new customers, provide savings of 10% in merchant service fees and provide a free terminal rental period of six months. In order to qualify for this offer, you must submit an application to Tyro between now and the 30 June.
 

These are the average speeds of EFTPOS in our point-of-sale system by type and day of the week. The lower the bar, the faster it is. The times are listed in thousands of a second, and as you can see with an ethernet connection, we are doing an acceptance now in just over a second. What is interesting is that the days of the week made very little difference. Using a network (light blue) it's a bit faster on Thursday, and I have no idea why but if you look on the slowest day which is Tuesday, you will see that the speed difference is irrelevant as who would in practice notice about 0.05 of a second? 

What also is good is that even with the slower WIFI connection (see dark blue), EFTPOS it is being done in about a 1.3 seconds. Even the older orange units are between 1.4 and 1.8 seconds. Much of the slowness with the WIFI is because of the merchants' router and the Internet traffic in the location, not the EFTPOS. A good way of speeding up the EFTPOS, if this 0.2 of a second is too much would be an upgraded EFTPOS unit, put on a better router and leave the rest of the traffic to the existing router.

This was quite an improvement over last year, as you can see here.

The speed of EFTPOS with tyro that we now have recently dramatically increased overall.

Surcharging is an extra charge levied on a customer at the point of sale for the cost of processing electronic payments. Dynamic is when it changes by pay type. Fortunately for our clients, we have a simple and safe solution for those wanting to introduce this fee, which is automatic with no investment or cost to set up it up, which can save their business money.

The amounts involved are NOT trivial. The Reserve Bank Of Australia (RBA) here which presumably the ACCC will use for a guide, stated that Visa or MasterCard debit transactions may cost a business around 0.5 per cent of the transaction value. Credit cards usually have a higher cost for businesses, and may cost the business up to 1-1.5 per cent for Visa and MasterCard. How they got those figures is beyond me, my figures based on some of my clients figures just on direct bank charges would be that for Visa and MasterCard debit and credit transactions about 1.65% which I think you should be using as a guide for your costs for an initial calculation.

Some points for NOT using surcharging

Almost all consumers dislike surcharges; one study showed "more than 90% of consumers want surcharges eliminated; one in four don’t return to a business if surcharged, and three in four tell others to avoid a business because it surcharges."

Cash is not free; it has to be in a collation, then counted, balanced, stored in a safe, then a trip to bank and then banking fees. Plus there are losses due to mischange, the increased the overall security risk of the premises, etc. The cost of cash handling and its associated costs in a business are commonly put down at about 2% to 2.5%, which is actually higher than the fees of the electronic payments. If so why discourage people from using cards with fees?

Some points for using surcharging

Surcharges allows retailers to offer cheaper prices as they are not subsidising those consumers who use more expensive payment methods.

Most people have a backup form of payment method, and if you offer them a choice, they can select the payment method that best suits them.

Some items the margin is so wafer-thin that they cannot be sold with some payment methods without surcharges.

Finally and for many, this is the biggest problem it allows retailers to offer more payment types, for example, American Express (AMEX), paypal and Diners, which a number of businesses do not accept due to higher costs. A lot of corporate cards are AMEX. Many people work in such organisations, and if they are doing company-related work, they need to go to a place that accepts AMEX. If corporate customers are important for your business, then you must accept AMEX.

I am sure you can add more to the list for and against.

Now assuming that you do want to introduce surcharging at least for some payment methods. We have two alternatives, Tyro is a good option here and we do recommend that you use it. It is automatic and easy to set up; the main problem is that it cannot handle most of the payment types, although it can handle the most popular.

However, our point-of-sale system can handle it all. This is how.

Go into the main menu, select Dissection Maintenance.

Now in Dissection maintence, where the yellow arrow is click the tab "Pay Types"

Where the orange arrow is you can read the existing pay types this business offers, note it does accept some of the expensive payment types like AMEX and paypal.

When clicked on paypal, look where the green arrow is pointing for what appeared.

In view of Australian standards, we do recommend that In Surcharge Status, you use "Charge Percentage" as shown here because that is what the goverment prefers although other formulas do exist here.

The $15 point, which is the generally accepted cutoff figure for micropayments soon unfortunately for most payment types you will not be able to use as the standards state it should be the same or lower then costs for all amounts. Although in this example, Paypal is not covered under the new goverment standards. As paypal rate is 30 US cents plus 2.9%, so what they did here is make it a bit higher under $15, 4% (see green arrow) and over $15 use the 2.9% (see blue arrow).

You will find extra details on this page too which I will discuss later.

Using this you can offer more flexibiltiy to your clients in their selection of payment types.

If you have any questions, or want to know more please let me know.

Here are some pictures from the Tyro nextGen Banking Summit which I attended.

Reader here will be happy to learn that POS Solutions, was especially noted in the speeches as being the first software company to integrate into their banking system. We are actually a foundation partner of Tyro.

One point that came out in the summit is that small and medium-size businesses is Australia has generally better technology then large business and that is actually large business which is holding SMB back.

Readers here may be interested in knowing that my previous post seems to have generated some comments. What was annoying to me is that despite this, they seem more absorbed in getting points than fixing the inaccuracies in their report! Despite what they say, their clients or anyone else POS software clients, including ours, should not have tranquillity about their customer credit card details and fraud. I certainly hope for the sake of their readers that they do not take their advice.

It is a severe problem, for example, the latest trend Micro report states

"Australia ranked second in the world for countries with the highest number of PoS RAM Scraper infections in Q1, with 10% of the world’s PoS RAM Scraper infections,"

If you want to read just how serious this problem is, here are some links from recent credit card data breaches using this technology.

{links have since been removed}

Unionpay is the largest Chinese payment network and the second-largest in the world; only Visa is bigger.

It is the main EFTPOS card used by Chinese tourists in Australia. They spend about $8,000 a trip, and on average, a Unionpay transaction in Australia is about $780. So I am pleased to say that come January, we will have a solution to handle it directly, bypassing the dearer option that many have had to do now.

For more details, click here.

A payment gateway is a service that allows a retailer to accept a customer's payment; examples would be VISA or debt card.

The problem is that the number of such payment gateways as the mobile replaces cards, is expected to increase dramatically. The problem from the merchants' point of view is that sales will be lost if the shop cannot handle these new gateways to Australia like Amazon, Authorize.Net, SecurePay.com, etc. Now these gateways are not small; they are huge overseas and people will come who want to pay using these methods, and if they are not able to will result in sales lost.

The first problem is that since the merchant account is small, its fees tend to be high. This can only be partly overcome by the introduction of surcharges, as some of these gateways have account-keeping charges. Say a $ US49 monthly account-keeping fee plus 10% is impossible to pass on to the one customer a month who buys an $A15 book.

The second problem is more serious, although, from the Australian retailer now, these gateways are small, there is much work in making just one payment. You need to set up an account for each gateway, sign forms, get it activated into your software, train staff how to use it, reconciliation, etc. Until some of these build up to reasonable volumes, activating a gateway may not be worth the time and effort. In the meantime, sales will be lost.

Our solution at present is to use payment gateways in Tyro and let them worry about the many gateways available. Since there is no commitment in Tyro, we do not see this as a problem for most of our clients.

The Tyro rates for these payment gateways are cheaper than going direct, plus our clients will have no hassles in use.

The reserve bank's review of card payments is quite interesting reading; you can read it here.

It is a long report, but one section I think is well worth reading is titled Ïssues for the Review," which you can read here.The facts are that since the introduction of interchange fees, although the rate on standard cards has fallen, the rates on premium cards have gone up.

These rates are now averaging about .5%, which is much higher than many countries like in Europe.

Premium cards make up about 30% of the market, and as the report states

Based on the hierarchy of interchange rates, the cost of the high interchange rates for consumer premium and commercial cards falls entirely on small merchants and other merchants that do not benefit from special rates.

The report also says that it is worth quoting in full.

The Bank estimates that the average credit card interchange rate for non-preferred merchants (i.e. those not benefiting from strategic or other preferential rates) was more than 50 basis points higher than the interchange rate applying to preferred merchants in the December quarter of 2014. For MasterCard and Visa debit cards, the average interchange rate paid by the non-preferred group of merchants is estimated to have been around 12 cents per transaction higher than the rate applying to the preferred group. These differences in interchange rates have a corresponding effect on the merchant service fees faced by the two groups which is in addition to the higher margin that acquiring banks would normally apply to small merchants relative to large merchants. For both debit and credit cards, the tendency has been for the differences in interchange fees applying to the two groups to have widened significantly since merchant specific rates were first introduced.

That why I was happy to read this release from tyro titled "Reserve Bank to save the poor $500m in bank fees." The $500 million is the difference between 0.5%, which is in Australia and 0.3%, which is in Europe now.

It makes interesting reading too, apparently the fees for small business for cards are up to ten times higher than for the big retailers, and the gap is growing.

I hope you give tyro your support on this issue. You can read their report here. Something has to be done about this.
 

A report by the

Based on the hierarchy of interchange rates, the cost of the high interchange rates for consumer premium and commercial cards falls entirely on small merchants and other merchants that do not benefit from special rates.

We introduced Tyro into the newsagency industry, a long time ago. We liked it both for technical and commercial reasons. Tyro connects directly through the internet so no phone lines needed. That saves money. Also because of this, Tyro is fast. With it, you can do an EFTPOS transaction in seconds. As it is a single entry, it reduces keying errors.

We were not the only ones impressed with Tyro. One of our competitors decided to follow us again. He is late but still now; he has gone to Tyro too. Clearly, he is not the only one impressed as it just went public. In today's difficult share market, their share offer was oversubscribed by 70%. That is an incredible score. It shows the share market, even in this difficult period sees it as a great product too.

Anyway, we arranged a highly competitive package with them for our users. When all is added, this package has saved our clients much.

If you want more information please contact Tyro direct
Anthony Haddad
Payment Solutions Sales
Tyro - Level 2, 125 York St,
Sydney NSW 2000
T: 02 8907 1726 F: 02 8907 1626 M: 0403 3475 74
 

I arrived at VANA to take a training session yesterday morning to hear it announced at the door, it is canceled. It was a shock both to me and people waiting to do this session. I looked who was there and from what I knew we had enough! Murphy's law again originally we assumed that VANA would be handling the attendance as usual. This time, VANA told us that we should do it. So I did it with Paul. The day before I was sick, so not contactable when Michael was doing last-minute organizing for the meeting. He did not know of my list of people only there were two on Paul's list and thinking only two booked, Michael was shocked. We normally get ten, twenty is not uncommon so he decided to cancel it. So he rang up both clients to cancel. However the ones on my list, showed up. Since I was there and they were too, we carried on with the training.

These were experienced newsagents who knew the industry having been in it for years. They knew the program and they wanted to learn a little more. With me, however, it is full on

Unfortunately because all I had was one day, I had to skip much. In the morning, we did customers. What I stressed here is the need to do an audit on your customers. It is now so easy for someone to make a minor mistake in the computer so a newspaper is delivered free by the newsagency long after the subscription is over. We often find errors doing changeovers from other systems to ours. Roughly we expect to find in 200 accounts, one error. Since a typical error is about $10 a week or about $500 a year it is worth auditing the accounts. This can be done over time. Say the accounts starting with A tomorrow. Next week the B's then soon.

We then went to subagents and then stock. Here I spoke about the need to check slow and zero selling items. I showed them the reports on how to get that information out. Then suggested some work practices here that work. At this point, I did not have time to get into the “sigma six” ideas, which also includes the sales of fast-moving items.

We then moved into the cash register. Since everyone knew the basic functions here, I showed them the cash register department analysis. I covered many such reports. Then showed them how to handle the sales per linear feet and how to monitor it over time.

Then later we discussed some of the electronic data interchanges that is occurring now, they were surprised how much we had achieved here and finally, we discussed some of the new technologies now coming at which point we had to end as the day had ended

I am waiting to hear their feedback comments. Based on the comments when they left, I suspect they will be positive.