Let's stick: Coins and paper money are so 1990

Baywatch, the Walkman and cell phones: The 90s gave us a lot of things. Some of it has rightly been forgotten. Other developments are still with us today. One example is cashless payment, which first became possible in Germany in 1991. Since then, we have been able to leave coins and paper money in our wallets more and more often. This is because EC cards, giro cards and credit cards are now accepted everywhere as a means of payment. And the smartphone is also becoming a popular alternative thanks to digital wallets.

Cashless payment is the future

Cashless payment is not a trend or a hype that will disappear again one day. The proof is provided by countries like Sweden and Finland. Our northern neighbors have long relied on card payments. In Sweden, for example, only 9 ^percent1 of retail purchases are paid for with coins or banknotes. Some stores even no longer accept cash at all.

Digitization and corona pandemic as drivers  

And in Germany? Here, 58 percent of payment transactions are still settled with coins or bills. But in 2017, this share was still 74 ^percent2! Cashless payment is therefore becoming increasingly important in this country, too. Even small purchases such as rolls at the bakery can now usually be paid for with a giro card. Debit cards such as the Girocard are now the second most frequently used means of payment, accounting for 23 percent of all transactions. Credit cards, which are primarily used to pay larger amounts, currently account for 6 percent of transactions - a doubling since ²⁰¹⁷³. One reason for this development is the Corona pandemic, which has given a real boost to digitization and thus also to card payments.

Do I need a card terminal?

"Card payment not possible" - if this sign is hanging in your store, it's time for an update. As described above, fewer and fewer customers are using cash. So if a potential buyer can only pay with coins or bills at your store, he will prefer to go to the store next door. What remains is an annoyed customer who shares his frustration with friends and acquaintances. The fact that you don't accept card payments will soon get around. You will miss out on a lot of sales. So if you don't yet use a modern POS system and card terminal , you should change that as soon as possible.

What are card terminals?

But what exactly are card terminals? Quite simply, card terminals are also called card readers. It is a handy system that can be used to accept cashless transactions. Card terminals are mainly used in retail stores, at gas stations or in hair salons. There are very different variants here, which we will discuss in more detail in a moment.

How do card terminals work?

Let's take an example from retail - the florist. Once the customer has decided on a bouquet of flowers, he takes it to the checkout and wants to pay. Now the giro or credit card is inserted into the slot of the card terminal and the PIN (girocard procedure, formerly EC cash procedure) is entered. Alternatively, the card can also be placed on the device (Near Field Communication - NFC) or payment can be made by signature (secured or unsecured direct debit procedure).

What are the advantages of card terminals?

A card terminal can be used to process payments via a bank card. This has a number of advantages. You can offer your customers a convenient alternative to paying with cash. In addition, the card readers accept all common cards such as credit or EC cards. The payment process itself is usually also possible without contact . This is a real advantage, especially in times of pandemic. What's more, as a vendor or merchant, you need to keep far less cash on hand. This significantly reduces the risk of theft .

Card terminals: What variants are available?

As the popularity of cashless payment grows, so does the number of card terminal variants. There are now countless models on the market, all of which have their advantages and disadvantages. We will now introduce you to the most important terminal providers and show you what differences you should know.

Conventional card terminals: Robust but inflexible

Older card terminals have sometimes been in use for many years and are affectionately called "bones". They are mainly found in supermarkets or small retail stores that use little modern technology. Conventional models are therefore often somewhat outdated and do not have a Bluetooth or WLAN function, for example. Yet these can be very practical, as we will see.

Modern terminal providers in comparison

Time to take a closer look at the modern variants. From the multitude of companies and solutions, we have selected three that are worth a closer look:

SumUp

The British company SumUp was originally launched by five German founders. Today, it is one of the best-known terminal providers in Europe. As a merchant or business, you can accept debit and credit card payments with SumUp. Payments via Google Pay or Apple Pay are also possible. Card terminals from SumUp have a Bluetooth interface and can thus be connected to a POS system . Many POS providers offer a native interface to SumUp, which enables a direct connection. The company develops various terminals that have different functions and can be controlled via an app . These card terminals cost between 40 and 130 euros, depending on the model. If you choose SumUp, you'll be charged 0.9 percent transaction fees for payments with a debit card and 1.9 percent transaction fees for payments with a credit card. In return, you save on basic fees, which are usually a fixed part of the package with conventional providers. Watch out: Credit card fees of 2.5 percent are automatically charged for NFC payments, regardless of the card type.

Zettle

The Swedish mobile payment provider Zettle has been part of PayPal since 2018. The company is currently active in eleven countries and operates in Germany from its headquarters in Berlin. The card readers are available from a price of around 30 euros. Transaction fees are slightly higher than with SumUp. The fee here is 0.95 percent for selected debit cards and 2.75 percent for all other credit cards. There is no fixed basic fee. Zettle's card terminals can also be connected to a few POS systems via Bluetooth and controlled via app. Here, too, increased fees are to be expected for NFC payments.

omono

Omni-channel payment solutionfor onlineand offline retailers- a somewhat unwieldy name, which is why omono is abbreviated. Founded in 2021 in Fürth near Nuremberg, omono has become a popular partner for digital payments, especially in the retail sector. But small and medium-sized businesses, trades or freelancers also use omono's card terminals. Every single component installed in the terminals is Made in Germany and the customer support is located in Germany. This is not an unimportant detail, since personal customer service is one of omono's greatest strengths. Defective terminals can be replaced within 24 hours on weekdays. The terminals are available in different stationary or mobile versions. Just like SumUp or Zettle, a transaction fee is charged. Some tariff options are also associated with a basic fee. However, since the rates are adjusted to your turnover, you are always automatically in the lowest rate system. This so-called automatic tariff system is unique in Germany and a good argument for omono. In addition, omono offers attractive services around the topic of payment, such as receipt archiving.

SumUp, Zettle, omono and conventional providers in direct comparison

We would like to simplify your decision for or against a system. In the following overview, you will find a comparison of the most important features of the different systems.

Feature: Traditional providers | SumUp | Zettle | omono

Cash register connection: ZVT or OPI interface | Bluetooth | Bluetooth | ZVT interface

‍Basic fee: Yes | No | Partial

‍Transaction fee: Yes (amount varies) | Yes Girocard: 0.9% Credit card: 1.9% | Yes Girocard: 0.95% Credit card: 2.75% | Yes Girocard: 0.24% Credit card: 0.99%

‍Card reading function: Chip | Chip/contactless | Chip/contactless | Chip/contactless

‍Disbursements: 2-3 business days | 2-3 business days / 1 business day with SumUp Card | 1-2 business days |1-2 business days

‍Runtime: Fixed | Flexible | Flexible

If you look at the individual features and especially the cost structure, it becomes clear that startups who do not yet have an overview of their expected card sales will do well with a solution like SumUp. If the monthly card sales remain below a value of about 2,700 euros, these systems are also the better solution in the long term. Those who generate more revenue from payments by checking cards or credit cards should rely on a provider like omono. Conventional providers usually come with a minimum contract period of 2-5 years. This is of course only a first overview. If you would like to learn more about the individual terminal providers and models, we would be happy to advise you personally. But first, here are a few tips that you should know.

Technical problems: What do I need to be aware of?

The card terminals presented here are generally very uncomplicated and hardly susceptible to malfunctions. Nevertheless, malfunctions can occur. Because whether Bluetooth or ZVT interface: There is no guarantee for a stable connection to the cash register and the card terminals themselves can also crash or malfunction. Terminals issued by banks or savings banks in particular are often whitelabel products and cause problems time and again. It is good if your terminal provider has a service partnership with the manufacturer of the POS system. omono, for example, cooperates with LocaFox and thus offers its customers fast and reliable help with technical problems of all kinds. This also has some advantages in terms of price, as we will be happy to show you in a consultation .

Additional costs: What should I expect?

Another topic is costs, which can surprise business founders in particular. Just one example is the discount. This is a service fee that is due when payments are made with credit cards. This usually amounts to between two and three percent of sales. Another fee is incurred if your payment provider does not clear the payments. This means that instead of collecting payments and then transferring them in bundles, many small amounts are transferred to the business account. In this case, a fee is often due to your own bank. The amount of this fee varies greatly from bank to bank. By the way: Fees may also be due for payments via NFC - i.e. with Apple Pay or Google Wallet.

Which system is optimal for my business?

You now know the most important differences between the individual terminal providers. Which solution is ideal for you depends on many factors. Do you want a secure system with personal customer service? Are the costs and fees decisive for you or do additional functions such as clearing and document archiving play an important role in your decision? These are questions that we will be happy to answer for you.

LocaFox: Use our advice for your business

At LocaFox we know the requirements you face as a retailer or business owner. Whether SumUp or omono: In addition to a suitable interface, we offer you above all flexible solutions with which you can secure your business success in the long term. Fast. Secure. Competent.

^{1 https://www.handelsjournal.de/land-ohne-bargeld.html
2 https://www.bundesbank.de/de/presse/pressenotizen/zahlungsverhalten-in-deutschland-2021-894082
3 https://www.tagesschau.de/wirtschaft/bargeld-bundesbank-studie-zahlungsverhalten-101.html}

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