Taking Card Payments at Shows

by Helen Johnson

You’re at a show, a customer is interested in your product, but he’s spent all his cash.� “Do you take cards?” he enquires.
“It’s the sales you lose by not having a card machine that we worry about,” says Emily McKillop, of Craft Central. “But whether the fear is real, we don’t know: it’s hard to quantify.� Anecdotally, we hear that increasing numbers of customers like to pay by card.� People like paying by credit card because it gives them security.”
Card processing company PaymentSense claims that customers paying by card are more likely to buy on impulse, and on average, spend 25% more.
However, would the potential extra sales cover the costs of setting up to receive payments by card?� There is no doubt that it will cost you money, and time too, as card processing providers won’t give prices until they have risk-assessed your particular business, making shopping around for the best deal a time consuming process.
Despite the costs, the Federation of Small Businesses believes that electronic payments have advantages that outweigh the disadvantages of handling cash.
To receive card payments, you need a terminal to take the cardholder’s details, and a special merchant bank account to receive card payments.

Merchant Accounts
The merchant account ‘acquires’ the card payment for you.� Many card processing companies offer both the terminal and the merchant account, and your business bank will probably do Merchant Accounts.� But you don’t have to use either, you can shop around.
Banks don’t like mixing merchant accounts for sales where you have contact with the customer and Internet sales.� You can have a merchant account that covers face to face and CNP (cardholder not present) telephone sales, but not one for face to face and Internet. Therefore,������ if you’ve already got a merchant account for Web sales, you will probably need a separate one for sales at shows.
Pricing structures are complex.� There will be a set-up fee, a monthly minimum fee, and transaction charges.� Credit card transaction fees are generally a percentage of the transaction value, while debit cards are usually charged at a flat rate.� Some providers make separate charges for services such as statements.� Lloyds TSB Bank said, “Transaction charges vary greatly and are influenced by many factors such as the business’s card split between credit and debit cards, how the transaction is processed, the volume of transactions being processed and whether the business is part of any trade association or buying group.”
Therefore, the banks want to assess the business before they’ll give a price.� They look at many factors, including how long you have been trading, turnover, proportion of credit/debit cards, and risks of fraudulent and/or disputed sales.� They may run credit checks, and ask for references.� If the bank thinks your business is risky, it may ask you to put up a cash bond.� It’s a long process � estimates for time taken vary from 2 to 8 weeks.� Since you’ll want quotes from 2 or 3 providers, to see who’s offering the best deal, it would be wise to allow plenty of time to set this up before going to your event.
The acquirers do not want to set up accounts for merchants just to use for a day or two,���� you are committed to the minimum monthly payment all year round. However, Alex Webster of 123 Hire says that his company offers a merchant account for occasional users.� He says, “A merchant can set up an account (min. 18 month contract) but not commit to hiring or buying a terminal on a permanent basis.� The merchant pays a small monthly (�10) account management fee and then hires a terminal when they need to.”
Price is not the only consideration in choosing a service provider � there are horror stories when disputes arise.� Therefore, when choosing a Merchant Account provider, make sure that they are a reputable business.� It’s worth checking that they are known to the leading credit cards, Visa and MasterCard, and perhaps asking contacts about their experience with providers.� Names that repeatedly arose during my research � as chosen service providers - were Chip and Pin Solutions, Streamline, and 123Send.

Chip and Pin Terminals
As well as a Merchant Account, you will need a terminal to process the card payments.� In a face-to-face transaction, the favoured equipment is the chip-and-pin terminal.� It’s considered the most secure system because it authorises the transaction before it takes place, then the customer endorses it with a PIN number.� To receive the authorisation, the terminal must be connected, either by telephone or broadband, to the bank’s computers.� The machine prints a receipt for the customer, and saves a sales list for the trader.� At a show, you’re unlikely to get landline connections, so you need a mobile chip-and-pin terminal.
Chip and pin terminals can be rented or bought.� If you buy, you still need to pay monthly telephone charges.� Rental fees may or may not include telephone charges, so check this.
Many terminal hire contracts are long term, often 36 months, with cancellation fees.� However, some companies offer short term hire, some for as little as 3 days.� There will be set up fees, hire fees, and transaction fees.� It’s also usual to pay a deposit for the terminal, refundable on return.� This can be several hundred pounds.� Remember you need your merchant account set up before you can use the terminal.

Alternatives to Chip and Pin card processing
All the alternatives to Chip and Pin still need a merchant account, and also offer the seller less protection against problems.� However, they are slightly cheaper, and may be useful as a means of finding out how many card sales you would really make.

Paper alternatives
Paper systems take an imprint of a card, then the customer signs the voucher.� They were the standard before the introduction of chip and pin machines, but banks still issue them as back-up, in case of breakdown of the electronic systems.� These are considered less secure, as the transaction is not authorised beforehand.� Risks can be reduced by telephoning for authorisation, and by taking the customer’s address.� However, the trader receives less protection should a transaction prove fraudulent.

Mobile phone alternatives
There are some options based on mobile phones.� They may cost less to set up, but are more risky, because they generally don’t offer the trader indemnity against fraudulent transactions.� They also don’t provide the customer with a printed receipt, although some offer the option of an e-mailed receipt.� Since a common reason for chargebacks is that the card holder doesn’t remember the transaction, this makes these solutions risky.� However, they may be a cheaper way of being able to ‘test the water’.� Be warned that the National Market Traders Federation told me, “There can be security issues involving the use of mobile phones to take credit card payments, and that is the main reason we have decided to no longer endorse them.”

Internet alternatives
If you have mobile internet on a laptop or smartphone, you could use a ‘virtual terminal’.� Disadvantages are that, unless you take a printer with you, you can’t provide a printed receipt.� Also, fraud indemnity to you, the trader, is not provided: you make the sale at your own risk.
It occurred to me that if you can use PayPal to trade on the Internet, could you use it on your laptop at a show?� PayPal UK says that PayPal’s standard online service could be used in this way, but would only work for customers who have a PayPal account.� However, they suggest that PayPal’s Virtual Terminal product could be used to process card payments.� This is intended for web sales, but, unusually for a card-holder-not-present system, could be used occasionally at shows � but they warn that there is no seller protection in this case.
Virtual Terminal has no set up fee, but still costs �20 a month, and, without seller protection for face to face sales, is less than ideal.� PayPal also warns that using Virtual Terminal on a smartphone, rather than a laptop, would be a less attractive experience.� However, if you are already using it for telephone sales, it could be worth taking to a show to find out how many sales you really would miss if you didn’t process cards.

Show Organisers Process Card Payments
Some event organisers make arrangements to accept card payments on behalf of exhibitors.� If the service is on offer, it means that stallholders don’t have to worry about hiring terminals and setting up merchant accounts: the show organiser does all that.� There is a cost, but it could be modest compared with setting up card payment services for only one show.� Rod Lewington does this for Art in Action, which, he says, “We do voluntarily.”
Rod explains that after obtaining quotes from a number of suppliers, he chose to hire mobile terminals from 123Send Hire.� He says, “There are all sorts of factors, but 123Send give the service we need.� It’s not cheap.� We have to pay a deposit up front, and get a rebate after.� For 30 machines, we pay �4,000 in advance.”
After a similar process, he selected Streamline for the Merchant Account.
He says, “We have quite a hefty bill that goes to both for the service we have.� BUT, everybody wants to pay by card.� And it is convenient, as you don’t need to handle so much money.”
Rod organises a team in each marquee at Art in Action to process payments.� Documents record payments made to the card transactions team, then the customer takes proof of payment to the stallholder to receive his/her goods.
At the end of the show, Rod collects all the paperwork and works out how much money each trader is due.� He says, “We charge 2.5% on card transactions, to cover our costs.� Because we’re all voluntary, we make no profit.� We try to pay within a couple of weeks.”
He adds, “If a stallholder has their own machine, we don’t get involved.� About half of our stallholders last year used our card service.”
Craft Central offers a similar service to exhibitors, but, not being volunteers, has to charge 5% on transactions to cover costs.� However, for exhibitors who don’t take card payments often enough to justify setting up their own merchant account, it is probably a bargain.
Craft Central’s Emily MacKillop says, “When designers hire our exhibtion spaces there is the option to also hire our credit card machine, subject to availablity.� I think as a designer being able to take credit cards does improve sales, but whether it improves them sufficiently to justify the cost will depend on many factors including: the particular business and event, the prices of the products, how knowledgeable customers are, if you are making to order/delivering later, etc.”
Kate Martin, of the Devon Guild of Craftsmen, says that they also take card payments on behalf of makers at exhibitions, but they do not hire out terminals.� She says, “It’s prohibitively expensive.”
Kate adds that card payments companies “Like big businesses; they’re not overly keen to help small businesses.� I have heard of people whose banks won’t let them have a Merchant Account unless they run it all year, even if they’re only hiring a mobile terminal for a short term.”

Show organisers don’t take cards - keep costs down
While some show organisers think there’s a benefit in organising card payment facilities, others think it’s better to keep overall costs to a minimum.� Paul Bishopp, of Woodland Crafts, says, “We don’t, as a rule, take card payments from customers on behalf of exhibitors.� This would involve having a dedicated desk, staff and admin etc which we don’t feel is justifiable.� We keep our stand fees as low as possible. �We do give “cashback” to customers at the entrance.� We don’t advertise this widely as, again, it is time consuming.� Nonetheless, it is quite widely used because exhibitors often tell their customers “we don’t take cards but you can probably get cashback at the entrance”.
“At a guess, I would say over half the exhibitors have their own card facilities.”
Tony Rose, of Romor Exhibitions, has a similar view.� He takes card-holder-not-present payments from exhibitors booking stalls, but does not take face-to-face card payments from the public.� When stallholders asked if he could process card payments for them, he looked into it.� But, he says, “It was complicated, I would need to set up a separate account, with all the costs, and we didn’t know what the turnover would be.”� He therefore decided, like Paul, to keep costs as low as possible for all stallholders.

Join a Trade Organisation
Many trade organisations negotiate special deals on card processing for their members.� These range from subsidised short term hire of terminals to block-negotiations of favourable terms on merchant accounts.� Many negotiate waived set up fees.
A few craft-based guilds have negotiated such terms, but many have not.� Therefore, it could be worth thinking more widely about what trade organisation you could join.� Many non-craft orientated organisations offer other valuable benefits to craft makers, such as public liability insurance, free banking, legal advice, or tourism marketing.� Benefits that are relevant to you could offset the cost of membership � and you’d get discount on card processing too.
For instance, craft makers taking stands at shows are eligible to join the National Market Traders Federation, who have years of experience of taking card payments in varied locations.� NMTF Communications Manager Roy Holland says, “The NMTF would suggest people use Chip & PIN Solutions as their after sales service is exemplary - any problems our members have had have always been overcome.� They offer good rates and provide NMTF members with a free starter kit.”
The Federation of Small Businesses offers discounts on merchant accounts and terminal hire through 123Send, and says, “Small businesses should try where possible to use electronic methods of payment.� It reduces cash and cheque payments which are expensive to administer.“
The FSB would like all small businesses to have better access to the advantages of electronic payments, whether through broadband or mobile technology.
Isabel Martinson, of The Giftware Association, says, “Unless you’re a big company with the buying power, you can’t negotiate directly with the bank.� By being a bigger organisation, we can do that.� Members of GA receive a preferential rate on credit/debit card processing.� They can hire terminals either short term or longer term.� People set up their own merchant account.� We give charges information to people who are really interested.� I can tell you that the set-up fee, which is normally �250, is waived, which provides an instant saving.”

User Experience
Karen Faulkner-Dunkley says, “I sell jewellery.� The majority of all purchases are made with either a debit or credit card.� I usually take some cash, but the majority of sales are always by card.”
”My advice is to join an association that’s suitable for you, in order to get more favourable rental rates and transaction charges.� I joined the FSB, but I could have joined the BJA (British Jewellers’ Association) as they also offer lower rates for members.”
Karen says, “As an FSB member the transaction charges are reduced, the monthly rental is lower and the start up fee - around �200 - is waived.”
However, like many other people, Karen fell foul of a three year contract she’d recently signed.� She explains, “I’d joined Streamline just before joining FSB.� I was paying much higher rental rates than a FSB member should have paid, but Streamline wouldn’t transfer me, because I was locked into a three-year contract.� When the three year contract had terminated I was transferred onto the cheaper rental rate.
“The mobile terminal works as a wireless mobile phone.� Sometimes, you have to go for a walk to get a signal.� I won’t do paper transactions any more: unless you ring up the card company, and get authorisation, they won’t cover you if anything goes wrong.”
She adds, “If there’s no signal, some exhibitors make the sale by paper transaction, note the customer’s address, take the details home, and put it through as a mail order sale.� But if there is a problem with the card, they’ve lost stock.� I never do this.� If I walk about, I can usually find a signal.”

Increasing numbers of customers prefer to pay by card, either because they’re run out of cash, or for the protection a credit card offers them on higher-value purchases.� If you want to process cards at shows, the ideal is a mobile chip-and-PIN machine, as it provides the most security to you and to customers.� For customers who understand these things, the ability to take cards also shows that your business has been vetted by the bank, and that you are traceable and reputable.
However, there are costs to accepting payments by card.� Only you can tell whether you can generate enough turnover to justify these costs.� Furthermore, only you can tell how many sales you might lose if you don’t take cards.� It is probably worth undertaking some research to discover this, perhaps by taking a stall with a show organiser who will process cards for you.� This would allow you to see how many card sales you made, without paying all the up-front costs of setting up for yourself.
However, if you join the right trade organisation, you could significantly reduce the costs of setting up to receive payments by card.


Chip and Pin:� A chip-enabled credit or debit card that requires the customer to input a PIN number to authorise the sale.� In special circumstances, customers have chip-and-signature cards: card processing companies will explain how to deal with these.

Terminal, also known as PDQ (Parallel Data Query) Machine: a machine connected to the banking system either by broadband internet or dial-up telephone, that authorises the transaction BEFORE the customer inputs his/her PIN to agree to the sale.� Watch out for the connection mechanism: an IP terminal, for use on broadband, won’t work on a standard telephone line.

Portable payment Terminal: A card-processing terminal similar to a cordless home telephone: it connects via a base unit on the premises, but won’t work more than about 60m from the base unit.� It’s popular in places like restaurants.� It is NOT the same as a mobile terminal.� Lloyds TSB Bank explains, “Portable terminals work on “Bluetooth” and have approximately a 200ft radius but they are still dependant on the base unit being plugged into a phone line and power point.� On average these cost around �25 per month.”

Mobile Payment Terminal: A card terminal using mobile phone signals to connect.� They can be used anywhere there is mobile phone coverage.� In the countryside, this can be patchy.� Some mobile terminals use only one telephone network, others are fitted with a roaming SIM, which can chose the best signal from several providers.� It’s worth checking coverage, and the right SIM, if you’re visiting shows held in the countryside.� Some providers’ websites have this information.� Lloyds TSB Bank says that costs of mobile terminals vary widely, and can range from �28 per month up to approximately �40 per month.� Remember when asking prices to check whether telephone connection charges are included or not: some packages are ‘all in’, others charge separately for air time.

Cardholder present transaction: The cardholder and the seller are face to face, such as at a show, or if the customer visits your workshop.� The retailer is responsible for ensuring that the sale is not fraudulent.� When using chip and pin, Lloyds TSB Bank says that this is the most secure type of payment, as the retailer can see the customer, and the PIN is also used.

Cardholder-not-present transaction (CNP): Web or telephone sales.� As the cardholder is not present, the retailer can’t check him/her, nor does the customer enter a PIN number.� Therefore, Merchant Accounts to receive these payments are considered riskier, and Account providers may require monies to be held for a period, in case of problems, before it transfers to you.

Acquirer or Acquiring Bank: The financial institution that receives card payments into your Merchant Account, then passes the money into your normal business bank account.

Merchant Account: A special bank account that handles electronic payments.� Once accepted for a merchant account, you receive a merchant number, which identifies your business in transactions.

Payment Service Provider: An intermediary for Internet Sales, that takes payments from your website to your Merchant Account.� It is effectively a software ‘terminal’ on your website, for which you pay a monthly fee.

Virtual terminal. Software that enables you to process card holder not present payments on your computer, rather than buying a separate PDQ terminal.� It’s mainly aimed at businesses taking orders over the phone.

Fees: Fees are levied for all sorts of things: set up fee, monthly fee, transaction fee (typically different for credit or debit cards), hire (or buy) of terminal, telephony fees for connecting the terminal, statement fees, cancellation fees if you want to break out of a fixed term contract (typically three years or more).� Any or all of these fees apply separately for the terminal AND the merchant account.

Paper transactions: Some people still use the old push-pull machines that take an imprint of a credit card, and the customer signs the voucher.� They are still issued as back up in case electronic systems break down, but banks don’t want to use them, because they don’t’ enable the sale to be authorised by the bank BEFORE it is completed.� Therefore, banks rarely protect a trader suffering a denied sale if he used a paper system.

Chargeback: If the cardholder disputes the payment � perhaps claiming that the sale was fraudulent, or that the goods were unfit, you could be told to refund the money.� This can happen up to 120 days after the initial transaction.� I’m told that the most common reason for a chargeback is that the customer doesn’t remember the transaction.

Credit Card� A card that enables its holder to buy goods on credit: i.e., they will pay later.

Debit Card A card that enables its holder to buy goods with funds drawn directly from their bank account.

PayPal: a business that enables account holders to transfer money through the Internet.

How Much Does It Cost?

Service providers in this sector vary their pricing according to many factors, making it difficult to get prices for a general query.� Here are some of the suggested prices I managed to get � once even getting different prices from different contacts within the same company.� Service users I contacted stressed that it’s not only price that matters: it’s getting the service that suits your business, and one that can resolve problems.
Unfortunately, there appears to be no shortcut to getting your own quotes, which will take you time as you need to supply the information about your business.

Here are the ranges of prices I managed to find:

Mobile terminal, per month, long term contract: from �24.99 to �40, + VAT,
per month

Mobile terminal, short term hire:
�75 per week, �136 for 3 days, �40 per day, �30 per month

Credit card transaction charges: 0.98% to 5% (rates vary according to brand of card used, as well as service provider)

Debit card transaction charges 10p to 50p each (rates vary according to brand of card used, as well as service provider)

Fixed terminal, per month, long term contract (requires telephone or broadband connection and power socket) Around �20 +VAT, per month

Terminal set up fee: �45 to �75

To buy a chip and pin mobile terminal:
�495 +VAT + �9.50 per month air time.

Merchant account set up fee �75 to
�350 +VAT

Merchant account credit card transaction fee� 1% to 6%

Merchant account debit card transaction fee ‘pence per transaction”

Merchant account minimum monthly fee �10 to �25

Merchant accounts may also make additional charges for services such as statements and for chargebacks

Selection of organisations offering members discounted Credit Card Processing:

This is a random selection of organisations that have negotiated special deals on card processing for members.� Inclusion in this list does not imply endorsement by craft&design.� The list is not conclusive: it is an example of the range of organisations that craft workers could join.� I suggest that readers make their own search for organisations that are relevant to their sector, geographic area, or main sales route, then check the benefits on offer, to decide which are the best organisations for them to join.

Craft-specific organisations:

British Jewellers’ Association,

Craft Central, www.craftcentral.org.uk

The Giftware Association www.ga-uk.org.� There is a special craft workers’ membership category of the GA.� Other benefits of interest to craft workers include legal advice and advice on trading standards, design protection and exports.

British Travel Goods and Accessories Association,for Manufacturers, Suppliers and Retailers of Travelgoods, Handbags, and Accessories,

National Association of Goldsmiths,

Geographically-based business organisations

There could be all sorts of local business organisations you could join, for example:

Black Country Chamber of Commerce�

Regional boards for tourism businesses, such as www.tourismnortheast.co.uk.� Typically, these also offer marketing support.

Business-based organisations

Federation of Small Businesses,
www.fsb.org.uk� Member benefits include free business banking and legal advice, as well as reduced card processing costs.

British cheque and credit association

National Market Traders Federation
www.nmtf.co.uk.� Other member benefits include Public and Product liability insurance

Thanks are due to the following organisations who contributed information towards this article:

Exhibition organisers:

Art in Action www.artinaction.org.uk
Romor Exhibitions� www.romorexhibitions.co.uk
Craft Central www.craftcentral.org.uk
Woodland Crafts www.woodlandcrafts.co.uk
Devon Guild of Craftsmen www.crafts.org.uk

Card processing service providers

Adelante www.adelante.co.uk
Lloyds TSB Bank www.lloydstsbcardnet.com
123Send has a division specialising in short term hire, 123Hire.�www.123send.net
ChipandPInSolutions www.Chipandpinsolutions.com
Streamline www.streamline.com
Seymour Direct www.seymourdirect.co.uk
PayPal www.paypal.com/uk

Membership organisations

The Giftware Association� www.ga-uk.org
National Market Traders’ Federation www.nmtf.co.uk
Federation of Small Businesses� www.fsb.org.uk
Association of Woodturners� www.woodturners.co.uk (Explained why they DON’T do card processing for members)
Craft Central www.craftcentral.org.uk

Craft designer/makers

KFD Jewellery, jewellery by Karen Faulkner-Dunkley, www.kfdjewellery.com

Business Advice:

Business Link� www.businesslink.gov.uk

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