Credit card swipe company calls on financial institutions to cut fees to small and medium businesses
21-Apr-2011 | News-Press Release
SureSwipe managing director, Paul Kent said: “We have been disturbed by increasing business closures. Since October, among our clients, 60 businesses have closed; a large percentage fell within the motor industry. That is cause for considerable concern because these are businesses that held on over two rough trading years but then lacked the resources to remain open. That figure is a disproportionate slice of the 100 that have closed in the last year; it shows a sudden acceleration of business closures.”
Johannesburg-based SureSwipe primarily deals with small and medium sized businesses ranging from retailers to professional services.
“If each business only employed 10 people that is 1 000 people now without jobs; but the real figure is sadly higher. High charges from the architects of this financial crisis namely financial service companies, particularly banks, are hindering the capacity of small and medium businesses to survive this economic downturn, and to begin growing,” Kent warned.
“It is more than two years since the Jali Commission called for bank charges to be lowered. That commission pointed out that SA bank charges are the highest in the world. But banks have ignored calls for fee cuts and government has failed to act. Now is the time for concerted action in the best interests of the economy and job creation.”
Kent pointed out that the Global Enterprise Monitor had shown that 65% of businesses fail within the first three years, and 80% within the first five years according to StatsSA. “Our figures suggest that the trend may be worsening,” Kent said, “as businesspeople, especially those in financial services, we need to take a lead to reverse this.”
During his Budget presentation, Minister of Finance Pravin Gordhan noted with concern that 42% of unemployment was for young people aged 19 to 29. He pointed out that: “Improving household consumption and accelerating investment will support an increase in economic growth over the medium term,” and lead to job creation.
“Among the issues to be addressed,” Gordhan noted, “are the findings of Judge Jali’s Enquiry into Competition in Banking – findings that are echoed by many people’s
complaints that bank charges are high and opaque. I have met with the chief executives of our banks to take up this issue. I believe it is time to put in place measures that will ensure that banking charges are fairly set, are transparent and do not create undue hardship.”
Kent said that SureSwipe ensured transparency to its clients in a number of ways:
• “Our sliding scale rates are transparent. Clients pay based on the amount of turnover recorded through our credit and debit card machines.
• “Clients are not put on a fixed rate and simply get left there until they complain. Some bank clients are being charged ridiculously high rates, because they don’t know any better. They have never been dropped to the new average rates of between 4-5% and are still paying around 6% or more.
• “SME’s should look at alternatives such as SureSwipe for reduced rates and improved
• “Our invoicing is done before we debit our clients accounts, so that they are aware of the amount and can come back to us with queries. This is important for small businesses as they can’t pay out large sums of money that are incorrect and wait for a refund, cash flow has a huge impact to their business.
• “Our pricing is explained in simple language and not hidden in small print. Clients know what they are paying for. They have access to our rates table so at any time they know where they are on the sliding scale payment curve.
• “Our costs are broken up into fixed monthly costs, fraud related costs (for example a penalty for processing manual transactions), a penalty for not paying debit orders, and then a sliding scale. If we have a billing error clients are immediately notified by email.”
Kent said it was important banks and financial service agencies rebuilt relationships of trust with clients. “Every bank claims it but it is a different matter when you speak with clients. In brand research clients have applauded us for being open and honest.”
Kent said: “The Minister of Finance said, ‘We need to get our small business sector growing.’ We agree with him, it employs 65% of the workforce. We want to encourage South Africans to buy close to home and by that we mean: buy from small stores. Buy from South African producers, and spend wisely. Question high charges and demand better treatment. Together we can boost small businesses and grow this economy.”
This release was submitted by a Newsbox user.
Any communication related to the content of this release should be sent to the release submitter.
- card machinecard paymentpayment systemcredit card paymentmerchant servicespayment methodscredit card machinecard paymentspayment methodscredit card payments
- 5 shop owners arrested as Card Company implements zero tolerance for fraud
- Pro2Clean – When It Really Matters
- Improved economic outlook in Zimbabwe raises IT investment in its financial sector