A county Antrim coffee shop has switched to cash-only payments to save money during the ongoing cost-of-living crisis, with the business saying they have seen people travelling from across Northern Ireland to support them since they announced the decision last week.
Not Another Coffee Shop, in Carrickfergus, County Antrim, has been running in the town for the last two years. Its delicious coffee, traybakes, and friendly, relaxing atmosphere has made it popular with locals.
Speaking to Gript, cafe co-owners sisters-in-law Leanne Monaghan and Tracy Monaghan, said the decision was financial: “We switched to cash only to save money on card machine cost and the fees on taking payment.”
“It wasn’t a hard decision for us because we had to save money somewhere with the rising costs of food and electricity,” the business owners said.
Card providers deduce a percentage of each transaction made by card, making it more expensive for businesses. Leanne explained that Visa Debit charged the café 1.4% per transaction, while American Express charges 1.9%. In the last two years, the charges have doubled, making it increasingly costly to keep the coffee shop open.
Asked whether they thought the decision would inconvenience those who would rather use card payments, the business owners explained a cash machine down the street close to the coffee shop should make it easy enough for customers to access cash.
They say that so far they’ve had a “really positive response” and that people have travelled from their homes across the North to see the coffee shop and express support.
“We have had a really positive response. A couple today got the train down from Ballymena to support us and another man cycled from Belfast because he saw the media coverage and he wanted to support us.”
Speaking on Tuesday, the coffee shop owners added: “We’ve had another few people come into the coffee shop for the first time to support us going cash only.”
They added that while everything is going really well so far, time will tell how the decision will impact the business.
Fears have been voiced that “interchange fees” charged by companies including visa and Mastercard for handling business transactions are adding to already high costs for Irish businesses. The issue has been raised in the Dáil, with Fianna Fáil TD John Lahart asking Finance Minister Michael McGrath for his views on the matter.
Deputy Lahart pressed the Minister for Finance about reports and complaints of card processing fees that have been levied by a company on businesses credit card accounts in the past year.
He also asked the Minister if he was aware of reports and complaints regarding an alleged increase in credit card (merchant charges) in a nine-month period by up to 134% by a company, which he said had “clear and adverse consequences for the businesses concerned.”
He added that he was aware of complaints and reports of surges in the cost of processing VISA commercial debit cards, where the year-on-year cost had increased by 385 per cent for some businesses.
In response, Minister McGrath said that while interchange fees charged by card issuing banks and businesses for accepting card payments has been capped on consumer debit and credit cards since 2015, Interchange Fee Regulation “does not cover commercial debit and credit cards.”
The Minister said there is presently no domestic card payment scheme, and Irish card payments are primarily facilitated by international card payment schemes such as VISA and MasterCard.
“The Central Bank seeks independently verified transaction and fee information from international card schemes operating in Ireland to ensure that they are operating in compliance with the Interchange Fee Regulations,” he said.
Minister McGrath said that while regulated entities “must comply with the rules regarding interchange fees, the merchant service charge is a commercial decision for each service provider.”
He said that acquiring services is a “competitive market and businesses in general, and smaller businesses in particular, could stand to benefit from lower rates by switching provider.”
This week, fresh concern was expressed that increasing payment fees by VISA were having a significant impact on the Irish SME sector. Home Project Centre (HPC) told Irish media outlets that card payment charges were more than doubling business costs.
The construction company said they had experienced a 134 per cent increase in card processing costs since this time last year.
The company’s card processing costs shot up from €170,966 to €400,472, representing an increase of €229,506 per annum, BreakingNews.ie reported.
Calling for intervention, HPC Group’s Finance Director, Sean McNamara, said that “excessive card payment charges are hindering the growth and operations of Irish SMEs, particularly those in the construction sector.”
“Since the majority of our customers are mainly businesses, we are being hit with disproportionate increases in the cost of processing cards, more than 134 percent year-on-year. This is extremely unfair, and the cost increases have no basis in reality,” Mr McNamara said.