Consumers say they would shop online more – if transaction fees were scrapped
Online businesses are calling out the ‘hidden’ transaction fees they encounter.
A study of 500 businesses which sell on the web found they re being hit by fees of approximately three per cent from traditional payment processing firms for each transaction.
Given the unprecedent challenges faced by businesses currently, 45 per cent said this is too much.
And 67 per cent claimed these types of fees take the joy out of running their business.
It also emerged 88 per cent believe it would have a positive impact on their business if these types of payment processing costs did not exist, with 45 per cent 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 ecommerce 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.
'Behind the scenes' costs
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 cent 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.
“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 per cent had no idea payment fees running up to five per cent of the purchase price were being added to the cost of items.
And 37 per cent have sympathy for online retailers because of the 'behind the scenes' costs they encounter.
While 45 per cent 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 CEO 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.”