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Everyone looks forward to Christmas (e.g. Payment Card Processors) but maybe not the New Year (e.g. Market Stallholders). This year a fair few are dreading the first quarter of 2014, so maybe now’s the time to make an early resolution to see off the gloom of the ‘Kipper Season’.

Two possibilities are (a) take a tax-deductible buying-trip-cum-holiday somewhere warm and get an edge over your competition, or (b) improve your plastic payment margins. If cash is tight then option (b) might be the only choice.

Some of the charges to SME’s (‘Small and Medium-sized Enterprises’) are outrageously high – anything up to 10%.

According to a report by SagePay – the World’s third largest Payment Provider – the remorseless rise of a cashless society continues, like it or not. Payment Providers such as SagePay, WorldPay and PayPal are the middlemen who process in-store and online EFT debit and credit card transactions for a percentage charge on each. Banks and Credit card issuers like Amex do the same and the fee is variable dependent on the volume of your turnover and the value of the transactions. Some of the charges to SME’s (‘Small and Medium-sized Enterprises’) are outrageously high – anything up to 10% – so (according to SagePay) because Shoppers now carry only £20 cash some £33m of turnover walks away each day when they are told: ‘Sorry mate – I only take cash’.

Such SME’s are (also according to SagePay) short-sighted as once they take cards they see sales turnover increase by 30%. That more than justifies the transaction charges.

Providers may be offshore and dodge paying UK tax.

OK the increased turnover is true enough but that’s not the entire picture. HM Government is concerned that once the cash economy has disappeared altogether then retailers will continue to be overcharged if rates are not opened-up to competition. Oh yes, and the Providers may be offshore and dodge paying UK tax. As SME’s are often portrayed as ‘the engine house of the economy’ the Government is proposing a new FCA regulator to supervise retail payment systems – but don’t hold your breath waiting for it to appear and charges to fall.

In the meantime why not spend the Kipper Season fishing around for a good deal? Some rates are coming down as new Providers emerge and the Federation of Small Businesses – – offers very competitive rates to set up a new Merchant account and process your transactions. In return for a modest membership fee they also offer assistance with Vat, tax inspections and insurances tailored to small businesses. Alternatively try Cardswitcher – – who claim to reduce the cost of card transactions for SME’s by up to 40% by comparing a range of providers. Their online service provides multiple quotes and shows how to switch between Providers. And finally, if you’re on a Open Market stall and reliant on a Mobile phone for card transactions rather than a hardwired data line go to to see if they can help. All their websites are worth a good long look and don’t forget to tell your bankers what you’re doing – and why – and ask them if they can assist. It helps the healthcheck rating they apply to your account.

Of course if you want to stay cash-only then so be it, but you might want to consider moving to Totnes in Devon where they have a thriving independent retail sector supported by their own currency.

The High Street is Totnes is doing rather well thanks to a strong core of independent retailers and few shop voids. This is largely due to the efforts of a grassroots community network, ‘Transition Town Totnes’ – – founded in 2006 by Rob Hopkins and Ben Brangwyn. Their intention was to encourage economic and social resilience in the local economy in response to dwindling oil reserves and climate change. The timing was spot-on. ‘What we are modelling here is not just about the survival of the High Street, it is about strengthening the local economy in the widest sense’ they say. That included a vigorous campaign to see off a proposed Costa Coffee ‘…as we already have plenty of independent alternatives and we simply don’t need it’.

To strengthen the local economy they established a community energy company and community brewery and encourage local people to buy local produce with the ‘Totnes pound’.

The notes can be purchased locally, 1: 1 for sterling and accepted in local shops and to purchase local services. Because they are only accepted locally the ‘money’ stays within the local economy and supports local employment rather than being sent off to distant suppliers and shareholders in London. Add some changes to Shoppers parking tariffs and it seems to be working for their High Street. Mary Portas please note.

The Bank will print banknotes on plastic, not paper as they last longer and are more difficult to fake.

The Bank of England doesn’t view the Totnes Pound as a threat yet but is moving towards plastic in a different way. It now seems likely the Bank will print banknotes on plastic, not paper as they last longer and are more difficult to fake and don’t fall apart in the washing machine. Canada and Australia already use these funky, transparent and difficult-to-counterfeit designs. The Bank seems intent on avoiding the 1940-45 crisis when expert German forgers flooded Europe with fake £5 notes to undermine overseas confidence in sterling. A repeat would make it far more difficult to sell British goods to countries in the EU.

It’s good to see the Bank outwitting the Euro and the evil empire of Frankfurt.

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