Independent food retailers have hit out at several point-of-sale technology (EPOS) providers that have cut off their ability to use third-party card-payment processing systems, also known in the industry as ‘merchant services.’
A number of delis and farm shops told FFD they had been left manually inputting customer bills after EPOS companies stopped their tills communicating with card machines, because integration with card-payment companies was switched off at short notice.
FFD understands that this practice has been adopted by a number of EPOS companies and it appears to be on the increase. In many cases, retailers have been given little notice of the move and told to switch to the point-of-sale tech provider’s own card-payment systems to restore smoother operations.
Many felt their only other option was to invest in entirely new till software, which would require laborious rescanning of products and staff training.
“It is a trend that many people within the EPOS sector are noticing,” one industry veteran told FFD. “A growing number of providers are offering their own merchant services and, in some cases, reducing or removing support for alternative payment providers.”
“In a sector like farm retail, where businesses are processing millions of pounds in card transactions each year, it’s understandable that EPOS companies may see value in managing that relationship directly, particularly when payment services can become a source of recurring revenue.”
The source stressed that there is a marked distinction between supplying a preferred payment solution and creating a platform that locks retailers into a particular provider.
“Most retailers understand commercial decisions. The issue is whether they still have the freedom to choose the payment provider that best suits their business. If changing card provider effectively means changing your entire EPOS system, that’s a very different conversation.”
They added: “Imagine if the same approach were taken with weighing equipment, e-commerce platforms or accounting integrations. Most retailers would expect those decisions to remain theirs.”
Mark Kacary, co-owner of The Norfolk Deli in Hunstanton, said he received a call from his EPOS supplier in late April notifying him that his capacity to use current card machines would be switched off in early May.
Following several phone calls and written conversations, he said the functionality was indeed removed.
“Now for us to take card payments we have to manually put the amount on the machine,” said Kacary.
He said his till-tech supplier had offered significant incentives to switch to its card-processing system but he liked the way his current one worked and small businesses were “under severe financial pressure” without shelling out to move platforms.
Paul Dutson, co-owner of Dutsons, said the Greater Manchester deli had been using a combination of third-party merchant services and EPOS supplier successfully for a few years.
He said he first learned of the forthcoming split between the two systems from the card-payment processing company.
“We’ve not had much communication from the EPOS side, except trying to sell us the idea of staying with them on the basis of solving the problems they created,” he added.
Dutson said the retailer had been manually inputting bill totals since the move.
“It is a faff, liable to mistakes, time consuming and we’d rather present a more professional image.”
Dutson said the EPOS supplier had offered to beat the deal that the deli currently has for card payments but that he didn’t want to cut ties with the existing provider.
He added that he would like to find a different point-of-sale system that linked to third-party machines, but feared this could require a lot of work to end up back in the same position.
“Can we get our data in a usable format? It would take me two weeks scanning products to get them on a new till. And what is going to stop other providers from doing the same?”
Charlie Pinsent, of Somerset’s Pinsents Deli, experienced escalating charges to use third-party machines from another provider a few years ago.
He said the retailer now “reluctantly” paid two companies card-processing charges. EPOS providers understood their importance to independent retailers, he said.
“They know your whole business is running through their system. We have about 600 product lines, the thought of getting them all on to another system is a headache.”
Responding to FFD’s request for comment, one EPOS supplier said: “As part of the normal operation of any technology platform, integrations may evolve or change over time based on technical, operational, commercial, and customer considerations.
“We appreciate that changes to business systems can be disruptive, and we always aim to support customers through transitions as clearly and smoothly as possible.”
This article first appeared in the June-July issue of Fine Food Digest.
