Comparison Of Costs

There are a number of apps available on the market and it is often difficult to calculate how much each one will actually cost your business. Indeed, some, such as our own ServiceTag, believe that they will actually make your business more attractive and thereby increase its size.
Nevertheless, it is best to put together the relevant figures to make a full calculation.
The principal costs are the ongoing monthly costs of running the app in your business. These costs can be broken down into 3 types

 

1. The cost of the app itself, whether that be –
a. A monthly subscription, or
b. A transaction cost

 

2. The cost of taking electronic payments in your premises, either by-
a. A conventional card machine, such as the one that you probably already possess, or
b. Through the app itself, as most of the apps insist that you must

 

3. The cost of taking electronic payments through the app, which you might do.We have done a comparison of how these costs might stack up for a typical business. The business is assumed to have –
• Monthly sales of £20,000
• Average transaction value of £7.50
• Transactions paid for as follows –
o Cash – 30%
o Conventional card machine ( including tap and go) – 40%
o In app payments – 30%

 

We have then considered the ongoing monthly costs for that business, on 4 different bases –
1. First using ServiceTag and charging 10p per transaction table service charge. Here a standard card payment machine is used for most electronic payments, with Square being used for in app payments
2. Second using ServiceTag, and charging 20p per transaction table service charge. Here a standard card payment machine is used for most electronic payments, with Square being used for in app payments
3. Third, using a different app, which is free, but which insists on using Stripe for all electronic payments
4. Finally, using a different app, which is free, but which insists on using Square for all electronic payments

The table below shows how the costs are calculated. In each instance ServiceTag is cheaper for the business. Indeed, the difference between scenario 2, and scenario 3 is over £6,000pa

The above calculations use the advertised charging rates of Stripe and Square, as follows –
• Stripe – 20 pence per transaction, plus 1.4% of value
• Square – 2.5% of value of transaction