CardFox is Ireland’s only independent payment consultancy and brokerage firm based in Co Wexford.
What started as an embryonic idea at a kitchen table in rural Ireland in 2015 is now a hugely successful operation which is rapidly targeting €1billion+ annual client processing volumes within just a few years.
The company has established itself as a market-leading force in the payments industry, providing access to the lowest card payment rates on the market for its growing list of clients in 46 countries.
Cardfox CEO Tom Galway spoke to us about the latest trends in the card payments industry and offered his advice on what businesses need to consider when choosing a card provider.
Hi Tom, tell me a bit about CardFox, what do you do for your customers?
We are currently the only fully independent payments consultancy and brokerage firm in Ireland.
The CardFox team works on behalf of our clients – not on behalf of any one bank.
We utilise 14+ leading Irish, European & International Banks/Payment Processors for comparative purposes to ensure maximum suitability for all clients.
Identifying the most suitable solution has several metrics which need to be considered in addition to just pricing including (but not limited to):
Fastest access to cash flow: If you process a payment today, when will those funds arrive in your bank account? Instant Access is now available for instore payments & no slower than next business day should be accepted in the 21st century.
Security: This is particularly relevant for businesses with online sales channels, or people processing payments over the phone. We examine how this can be achieved with the maximum level of security.
Hardware: We utilise 6 different terminal providers to provide solutions based on the bespoke needs of any client. This can depend on local 4G network, WiFi strength and indeed even the physical geography of a building or the portable/mobile processing requirements of the client. If hardware doesn’t work the whole system crumbles.
Software/Integrations: Not all providers integrate with all platforms/gateways or accounts packages/ePOS systems etc. Additional functionality such as gift card acceptance/fuel cards/American Express or requirement to securely store cardholders details for recurring payments/process secure payment links may greatly enhance any payment solution.
Lowest cost transactions: There are actually 3 distinct price calculation methods available in the market and based on volumes/average transaction values/card types accepted & how transactions are processed can make a mockery of just getting “blind quotes” from the market. For example over 40% of providers surcharge card not present payments so if this is a large element for any client then any pricing from these banks/processors is futile. Many banks also have niche areas which they want to be competitive within & CardFox can often use our client bank purchasing volumes to secure additionally discounted pricing. In general we can secure improved pricing for over 95% of businesses in Ireland & The UK.
Ability to use card payment turnover to secure finance- this is an innovative finance product which has been available in the global market for 5 years+ and is now getting traction in Ireland. It is a lending structure similar to invoice discounting but for card based businesses and is fast, flexible and indeed accessible funding. CardFox has an approval rate of 90%+ of applicants within 48 hours of application.
What is the biggest mistake that businesses make when choosing a provider?
There seems to be the misguided opinion that phoning around a number of banks and getting “Quotes” and then choosing what looks like the lowest figure is the best route to a solution.
Unfortunately the industry is much more complex than a simple quote as banks can take a rate or cost and apply a range of calculation methods to it so that the final figure can end up looking very very different to what the business expects.
The average man in the street would not be aware of the subtle difference between blended pricing, Interchange++ pricing or mixed pricing and how this can affect their charges each month. The devil is always in the detail & professional independent advice is critical to achieving the best overall result.
Phoning around for “quotes” in the payment industry is akin to phoning a jeweller and asking what is the cost of a diamond without knowing what clarity, carat, cut or colour is required- providing insufficient information leaves many requirement gaps which can potentially be exploited in T&Cs. Extremely detailed requirements need to be considered and expertise is required to avoid potential pitfalls.
Personally, I know nothing about utilities, business insurance or tax advisory so I engage independent experts in those fields to help our business have the most suitable solutions- the payments industry is no different and CardFox is the foremost independent consultancy in the payments sector.
What trends have you noticed in the payments industry?
Covid 19 has changed the payment landscape immeasurably. Some businesses now accept up to 90% of weekly turnover via card and while there are still some businesses that choose to avoid card payments- the pandemic has reduced that number significantly.
Why? Ultimately, the choice of payment method is in many cases more up to the consumer rather than the business. If your customers want to pay you with cards then it’s probably good business sense to facilitate them in any way possible? Cash flow is king and critical to successful recovery post-Covid & accepting card payments in-store, online or over the phone is one method of ensuring that you are paid as quickly and securely as possible.
Contactless tap has become the crack cocaine of the industry (Irish limit currently €50- this is increasing in The UK to £100 so it is very possible that the domestic market will follow suit). It is hard to believe that this payment method was not available 10 years ago and now accounts for billions in payments each and every month. (€1.38 billion in July 2021).
How do you feel about a cashless society?
I have mixed feelings but ultimately I don’t see Ireland becoming 100% cashless even within my lifetime. Cash will always have a place as valid and legal tender. I do think cashless is highly beneficial for certain sectors because it removes a lot of the risk of theft or pilferage. You also don’t have the added time expense in having to bundle cash into the correct denominations and take it to a bank on a daily or weekly basis. What is the value of that time & hassle alone?
A lot of businesses would have felt that cash was free – it’s actually not as all banks charge in excess of 0.50%+ to lodge cash and worst still are cash for coin exchange fees which can be monstrous. The reality is that it is actually more cost-effective and secure to process a personal debit card than accept cash and lodge it.
On the other hand, now that businesses are experiencing anything up to 90% of their turnover in cards, it has become a major cost- in some cases now a higher cost than the annual insurance cost of the business and it is imperative that each business seeks to control this in so far as possible to remain competitive. Just because you have an existing payment solution doesn’t necessarily mean that it is the most suitable for your business- have it compared and tested against the market.
My major gripe with a majority cashless society is that the cost is solely borne by businesses. EU Consumer Law currently prevents the cardholder from sharing the charge for processing (except on commercial cards) and the Exchequer has full visibility of all transactions- every penny is accounted for. In The USA in all bar 4 states the cost of card processing can be shared between the business & the cardholder however in Europe the business is solely covering the cost. Fair? Not in my opinion and I strongly feel that business bodies should be lobbying for legal amendments. Surely businesses have suffered enough and have huge expenses already? If the consumer wants to pay by card and the state craves the visibility/traceability of card payments then why not have a shared cost?
What should cardholders know about security and the threat of cybercrime?
Cybercrime & chargeback of ‘card not present’ payments is a multi-billion dollar worldwide problem. Irish businesses may not have been previously as badly affected as other areas but this is changing rapidly. For example- how many businesses are aware that EVERY payment processed over the telephone using card number, CVV & expiry can be eligible for a chargeback by the cardholder for up to 180 days? How much risk are businesses running- often unknowingly? How can security on these payments be increased & risks mitigated? Indeed how many businesses are being charged “non-secure” or MoTo premium by their current payment provider- can these surcharges and additional costs be mitigated?
PSD2 & SCA2 requirements for online retailers have come in from Jan 2021 and will help to reduce risks for e-commerce but there are also specialist software and monitoring programmes that further enhance security options. Has every business had its full payment structure (POS, Card Not Present & e-Commerce) reviewed for possible shortcomings & security risks? In the 21st century not having a security review is like having a business premises with no alarm system or locks on the front door.
Why choose CardFox?
As the only fully independent payment consultancy and brokerage in Ireland- CardFox is bank agnostic- we work on behalf of our clients, not any one provider. Statistically choosing the best options from the market coupled with professional independent advice can secure improvements for 95% of businesses. This is the CardFox core area of expertise and in some cases we can actually secure improvements without the need for a provider switch- again we are unique in this ability.
If you phone a bank, they’re just going to tell you about how great they are. Then there’s a horrible term in the industry called “ISO” which means independent sales organisation – the reality is that many may often just be sales agents for one of a limited number of banks.
Caveat emptor- buyer beware is absolutely apt for the payments business. The level of complexity behind the card schemes, Visa/MasterCard and processor systems leaves many potential pitfalls for the unsuspecting business. A grain of sand can tip the scale and the independent and unrivalled industry knowledge which the CardFox team possess can help all businesses from SME to PLC to navigate the safest path. When we see adverts for free terminals, or invitation to treat “giveaways” it actually makes us cringe as banks/payment companies don’t generally give away anything and we immediately investigate where the T&Cs are structured to recoup in spades any perceived discounts. There are also a number of organisations currently “quoting” Interchange cost plus pricing mechanisms where what they are actually quoting is the banks margin above Visa/MasterCard cost and not the full transaction costs. This is far from the same thing! It is amazing how many businesses and business advisors fall for a sales pitch and end up carrying the cost of any unsuitable contracted solution for years afterwards.
CardFox genuinely cares about finding the most suitable solutions for each and every client. Our team loves the challenge of establishing each clients’ exact needs and then using our expertise and independence in the global market to source the most suitable products and providers. We run a detailed audit on every file so any recommendation is then based on mathematical fact rather than any personal/professional opinion or sales pitch and this helps all of our clients to make informed and financially beneficial decisions.
You have been recognised as a thought leader in the payment solutions industry, how has that impacted your business?
The Accreditation has been fantastic for our business. It is an independent acknowledgement that as a business and as a team we are going in the right direction. The metrics used by AIBF of Trust, Performance & Customer Centricity are absolutely aligned with our principles at CardFox and hence we were delighted to be accredited as Thought Leaders in 2020. Personally to be accredited as Financial Services Person 2021 is a humbling accolade when one considers Ireland’s recognition as a Fintech leader in the world and the huge number of excellent people and innovators in the sector.
We see our collective accolades from AIBF as an acknowledgement that our business has a real value to clients and is recognition of the hard work of our staff- huge credit is due to our team, and every single one of our valued clients whom have helped us to reach our current position in the market. We hope to assist 000s more businesses in Ireland, The UK & globally in the years ahead as our passion for payments is unwavering.
Any parting words of advice for cardholders?
For cardholders I would advise caution on the level of contactless tap spending- it is a very easy way to spend up to €50 each time & these sums quickly mount up. I would also strongly advise all cardholders to clear credit card balances at the end of each month to avoid large interest fees accruing- credit card debt can be a debilitating factor on personal finances and indeed an impediment to commitments such as mortgage approvals etc.
My final piece of advice is for all consumers and cardholders and that would be to support local and Irish businesses. It is going to be difficult for many indigenous businesses to recover so please try to support the local economy- these businesses are the lifeblood of many communities so instead of spending with large international corporations online try to stop and think of the local business who employs your friends or family, and those who support your the local sports clubs etc. We are all in this together & they now need all of our support more than ever.
To learn more about CardFox Merchant Services, visit their All-Star showcase page here.