Archive for August, 2011

The Costume – Best Irish Online Trader 2011 Nomination

IIA Net Visionary Awards

The Irish Internet Association have shortlisted one of my businesses, The Costume, and myself for the award of best online trader 2011. The annual competition is part of their net visionaries, which celebrates leaders in the online and digital market place. It’s a public vote to decide the winner so if you have a spare 5 seconds, a click and a vote on the below would be most appreciated. – New Business Launch

This weeks sees the launch of my latest venture, a very niche specialist firm in Radar technology and other Marine electronic equipment.

Marine Electronics Website

Marine Electronics Website

This is the first web venture taken on by Zatori which is specifically targeted at more than one country as today all are ventures, while big exporters, were developed to predominately serve one country – Ireland or India in the case of The Costume Shop India.

We’ve teamed up with several of the industry market leaders such as Raymarine, Lowrance, Simrad, Cathelco and B&G Marine, to offer a wide and varied range of equipment to suit every size and shape of small boat, yacht and fisheries vessel. We’ve also started to partner with installation firms accross Europe who our customers can use to fit the equipment on the vessel.

Using our experience, superior technology and extremely lean distribution center, is shaping up to be a great success with much interest from customers from every corner or Europe already visiting the site. It’s early days and the sites content is growing rapidly, but these are very exciting times in the Zatori Offices.

Changes from Laser to Debit – Increase Fee’s 5,100%

It seems in the recession businesses are being squeezed for every drop they can get from the proverbial stone. However the the merchant banks increase has to take the biscuit. Banks are in the very slow process of changing Laser cards over to Visa Debit cards, in a move that most people assume was just re-wording a card that does exactly the same thing – allow you to spend money which you already have in your account, without the need to write paper checks.

Merchant Bankers Profits

Merchant Fee Increases

What myself and nearly every other retailer in the country didn’t realise was that some were infact positioning themselves for instant, supernormal gains.

A €500 purchase last year paid by Laser card would have cost the retailer roughly 15c. The same purchase for the same customer & amount this year, using their spanking new Laser replacement, Visa Debit Card, would cost the retailer €7.75 – An astonishing 5,100% increase in their fee’s on the transaction with the flip of a switch! The change happened because by moving from Laser which is a fixed fee charge to a Visa debit, they “can” charge a percentage commission on. Banks are one of those institutions which you tend to have as little contact with as possible, you assume if there is a change in their rates they will pass them on, like when the ECB change interested rates your mortgage changes too.

The above is a personal example from My Merchant Bank – Elavon, however other banks are also benefiting, some only taking double digit increases in the fee’s. As I’ve said before Merchant bankers are probably our least regulated banks in Ireland.

Now what really gets me is when I happened to stumble across this injustice and bring it to their attention, they “offered” to reduce the 5,100% rate increase to a MERE 360% increased fixed fee, but there is a further cost too for this mere increase. If you fix the fee at 54c, up from 15c, but better than 1.55%; Should someone spend only 5Euro, their cut on the transaction is over 10%. One way or another they will squeeze some money from the stone.

Now put this in perspective of your business. How much is this change in a technicality going to cost you? And were you aware of it? If you want to fix your fee on transactions via Visa Debit it is possible, so you will need to approach them and request to negotiate the deal. The problem with negotiating with these banks is there is no real leverage. They hold all the cards and competition amongst them is extremely poor, in my experience it’s been a tale of who’s the least incompetent to preform what is an automated function once you’re set up.

So rather than just take it on the chin and complain, I propose we do something about it. Lets get some leverage and form a buying group, with this group we use the combined buying power to not only lower or bring back transaction prices to, wait for it, “the good old days of the 2008”; but also we could insist on basic common decency like responses to calls and emails within 48 hours and advanced warning on when ‘minor’ changes in their industry are about to set us back tens of thousands on our balance sheets.

Very interested in your thoughts and comments below, If your interested in the buying group for merchant services (companies big & small welcome) send me a message on Twitter @Ronanob.

———————————–# Update 12/08 #———————-

As a further comparison, UK retailers are paying 12p to process visa debit cards Vs our 1.55% variable or 55c fixed fee options. Its yet another reason why Ireland is such an expensive country to do business in and has difficulty in competing in the export market.

———————————–# Update 16/09 #———————-

Thanks to all who have joined the buying group, I’ll be sending around information next week via email. In the mean time I really must stress that if you have a merchant account you should contact your merchant bank to find out if you are on a fixed or variable rate for visa debit and make an informed choice which provider is now offering the most suitable rates.

All of the merchant banks have been very willing to participate in quoting for the group so I believe we have a very fair process in place now, buying rates will reflect the merchants risk level, turnover and industry so that everyone is treated fairly. In the process Elavon have met with me and taken on board suggestions to address other concerns I had and make improvements in their security, which is a very positive step forward. I’ve also been impressed with AIBMS who have changed a good deal since we worked with them some years ago.

I still believe the industry has a long way to go however there is signs of competition and “a customer centric” approach, which is a very welcome insertion. Thanks to all of those in the media who featured this blog post in their newspapers, radio shows and tv news.