News Card Payments
November 2008 From December 5th we are no longer taking card payments for on-going services such as broadband. This means regular monthly billed customers that we automatically charge at the start of the month will have to pay by other means from January 2009.
We may still be accepting cards for one-off charges when shipping equipment, but there will be an admin fee.
Affected customers are being individually written to.
Other payment methods
We offer a number of other means to pay - the most appropriate for on-going payments is Direct Debit. However you do not have to change to Direct Debit, unless on one of the tariffs that require this.
- Direct Debit is safer than a continuous card authority as the rules for correcting mistakes are much simpler and clearer. The rules for advance notice are also very specific so you always know you are going to be charged and when and how much. Obviously if we make a mistake please contact us first and we will credit your account right away - we are careful to avoid mistakes. With Direct Debit you always have the assurance of the Direct Debit Guarantee providing an immediate refund from your bank if there is a mistake.
- Internet banking is useful if you want to make your payments manually when you decide. You can pay by BACS or the new fast payment system. Ensure you quote your account number on the payment (e.g. A1234A). The bank details are on the invoice.
- Standing order can also be used as this is the same as internet banking. You still need to ensure the correct payment reference is quoted, and need to change the amount if the amount we charge changes so check invoices that we email you.
- Cheque payment can be accepted too. This is more expensive for you and us, and has the uncertainly of delay in the postal system, but we do accept cheques and make no charge for handling them at present.
Changing from Debit Cards
If you currently pay by a Debit Card then the payment already comes directly from your bank account anyway - changing to Direct Debit is simply a matter of advising us of the bank account details instead of the Debit Card number. We'll take the payment from the bank account you tell us, and you get advance notice with Direct Debits as part of the scheme rules.
Changing from Credit Cards
If you currently pay by Credit Card then you are giving yourself extra time that can be used to then later settle your credit card bill. If you change to Direct Debit, rather than taking the payment on the 1st you can choose when in the month the payment goes out from 1st, 9th, 17th or 25th.
Credit accounts
If you currently have a credit account you will be able to retain this when changing to Direct Debit, even though it makes no real sense to give people credit when we control the payment method. The Direct Debit will come normally out somewhere around the 20th to 25th of each month, however we can change to aim for a specific date if you wish.
How to set up Direct Debit
The accounts control pages for your account have an on-line Direct Debit set up, but we are happy to send you a more conventional paper Direct Debit Instruction form and a freepost envelope if you like - just ask accounts. We are including these in the letters we are sending out.
Comments?
We are sure customers will have questions and comments, so please complete a feedback form and we'll get back to you as quickly as possible.
Feedback
We have had some feedback to the letters and one point that has been raised is that some customers have had bad experiences with Direct Debits in the past - wrong amounts or dates and lack of notice. We appreciate this concern, but such issues are not with Direct Debits themselves but with whoever you were paying by Direct Debit. People who trust us to take card payments correctly every month have no reason not to trust us to do exactly the same with Direct Debit. The difference with Direct Debit its that if we do make a mistake you are guaranteed an immediate refund by your bank.
Why now?
We have been taking cards for over a decade and using the same Merchant Services company for all of that time. After several years dealing with cards we started taking Direct Debits. This requires a lot of trust from the sponsoring bank, but we have a good track record, good turnover and make a profit. Importantly we had good invoicing and charging systems in place already.
The main reason this has happened now is the latest from the banks regarding security measures. We have always taken security seriously with encrypted backups, restricted and encrypted access to servers, secure web pages, and so on. The new rules seem rather strange and unnecessary and include things like latest virus checking s/w (on a linux box?). They also appear to include potentially expensive audit and certification that we meet the new rules. Meeting the rules is not the issue, but the extra cost is a concern as we would need to introduce a card processing fee soon.
With this in mind we have been discouraging card payment, not taking it for new accounts, and suggesting that we introduce a processing fee. The long term plan to do little or no card transactions.
However the security measures themselves are not the issue - the big issue is that the banks think they can fine us if we don't comply.
Just to clarify, a fine is something a court imposes on a criminal. It is not something you can have in a contract. You can expect someone to pay costs for breaking a contract or for liability in tort, but you cannot fine people in a contract. The merchant services company have stated that we can be fined up to £300,000.00 even if there is no breach in security and hence nobody has suffered any losses.
It would appear that if you try and point out to the merchant services company that contract law does not actually allow fines, they terminate your account on 30 days notice! We made it clear we are not refusing to deploy the required security measures, just that they cannot actually fine us. They have made it clear that it is just because we have said they cannot fine us that they are closing the account.
No problem getting another merchant account, we have an excellent track record with hardly any claw-backs. But we really do not want to have the same issue with the next merchant services company thinking they too can fine us either, so this has simply escalated the date when we stop taking cards.
Banks thinking that they can charge fines and penalties is not new, as there has been a lot of news on reclaiming bank charges. Banks stating they can fine small businesses and then simply cutting them off when they point out their error, is just wrong.
So, we do apologise for any inconvenience caused, and for the short notice of this change.
