Fewer small businesses in Sweden to accept payment by cards as high fees put pressure on earnings


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Monday, 15 August 2011
Several traders have completely stopped accepting cards as a means of payment on small purchases, to avoid constricting Swedish bank fees.

According to the Swedish Trade Federation, this is happening just over a year after card charges were banned by law. Those affected most are, small kiosks and restaurants, those who receives payments for smaller transactions.

The battle about how much it will cost for stores and shops that accept different types of credit cards has been going on for many years. On the one hand, small retailers argue that small purchases have led to looses for their business due to bad banking agreements and terms that have constricted them.

“Each credit card transaction costs between Skr3 to 50 ore. It is a dilemma when people buy smaller things such as a magazine with their card, because there will be a loss of business for the merchant,” says Bengt Nilervall, payment officer at the Swedish Trade Federation.


On the other hand, the banks, gives a different picture of the card costs, saying that in Sweden charged are relatively low for card processing fees from small businesses.

“Since 1992, prices have fallen from Skr5 to over Skr1. Traders have found it that it was too expensive for twenty years,” says Jan-Olof Brunila, Deputy Head of Swedbank's card business.

It is clear that the traders, who joined the Swedish Trade Federation, have a framework agreement that gives them a price of Skr.75 per purchase with debit cards. But the vast majority of businesses are not members, and therefore must negotiate with the banks themselves.

Bengt Nilervall of the Swedish Trade Federation says there could be problems if more stop are taken accepting cards for payments over a certain sum. Cash increases the risk of robbery and may mean fewer customers for the small trader in the long run.

There must be an option that allows smaller buyers not be expensive for merchants,” he says.
Swedbank is the bank in Sweden that is responsible for the largest number of card transactions. Deputy head of card operations, Jan-Olof Brunila do not agree with the image that the traders on a large scale would have stopped receiving cards for a certain amount since last year's ban. Nor, he sees no possibility for banks to further lower their card processing rates.

“There is no single bank that determines prices, but competition and market. Card payments are increasing in number by about ten percent per year, another trend we have not seen before,” he says.
By Team

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