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29 March 2012Zilvinas Bareisis
Earlier this week, Payatrader announced launching a card processing service aimed at the UK small businesss across a broad range of trades, including builders, carpet cleaners, locksmiths, pest control, window cleaners, mobile mechanics and decorators. The home service providers and traders market has been underserved by the payments community in the past and is often quoted as an example target market for new payments innovations, so it's good to see an actual live solution aimed at that market. This market segment was identified by the UK Payments Council as an important user of cheques, and while there is no longer a formal commitment to get rid of cheques in the UK, all efforts to move away from paper-based instruments are welcome. Of course, the competition is heating up - P2P solutions, such as Barclays' PingIt, can be used in this context. The likes of Square and other US-based players with "dongles" are designed to work with mag-stripe cards and are therefore less suited in the EMV environment, but the corresponding EMV solutions, like iZettle are also coming to the UK. And Celent has had a number of discussions in the market about potential mobile invoicing and payment solutions targetting the traders. Payatrader is a different kind of a card acceptance solution. It aggregates small merchant transactions and enables the merchants to accept cards without monthly fees, one of the barriers for merchants with relatively low volume of transactions. However, monthly fees are not the only barrier - for someone who is used to cash and cheques, suddenly paying per-transaction is a big mental obstacle to overcome. How quickly the traders get the money is another concern - cash is instant, whereas with Payatrader they have to wait on average 10 days to settle. And it's no secret that customers often get quoted a significant discount for paying in cash. So, while all solutions that can help this market segment migrate away from cash and cheques are welcome, it will be interesting to see how quickly Payatrader can get to a critical mass of merchants and consumers.