It’s 2020 and visitors cannot pay for their villa, hire car and tours online. Locals cannot pay for shopping online. What is going on in Barbados?

Credit Card Processing

Why is Barbados so far behind in online payment processing?

The simple answer is: It is the fees the local banks try to charge local businesses to accept cards online.

The fees are so disproportionately high as compared to the rest of the world, that most businesses simply cannot afford to utilize online payment and so opt to keep with in-person credit card terminals or cheques and cash.

How does online payment work in Barbados?

Banks in Barbados offer two payment processing engines – “Plug n Pay” and “First Atlantic Commerce” – the payment processing of a credit card payment is not done by the bank, it is done by the 3rd party who securely checks and authorizes the payment. The 3rd party then transfers the successful payment to your bank (this can vary from instantly, to days waiting, depending on your arrangement with the bank). Some banks require a $10,000 or $15,000 holding deposit to even allow you to accept payments online.

Your website must have a module (as part of an online shop or system) that can connect and converse securely with Plug n Pay or First Atlantic Commerce to carry out the transaction.

What does it cost to accept credit cards online in Barbados?

Bank fees range from 3.5% to 7% per transaction depending on the bank and your bargaining power with them. Expect to be paying the higher percentages if you are a new or smaller business, most commonly we see clients being offered 5-6%.

There is an additional small charge from the payment provider (Plug n Pay/First Atlantic Commerce), typically around $20USD/month and $0.15c per transaction.

So why is it so expensive?

We simply do not know. It makes no sense. The authorization and transaction are provided by a 3rd party yet the banks charge a healthy percentage on top of this. In the United Kingdom, for example, a new small business can expect to pay between 2-3% per credit card transaction and about 20 pence per debit card transaction. Even PayPal in the rest of the world, which is considered expensive, is 3.5%.

Are there any alternatives?

Sadly not really, PayPal is available in Barbados in a limited form, where you can withdraw to a Visa card or Visa debit card, but by the time you have gone through multiple currency conversions from PayPal and your bank, it ends up between ~9-10% per transaction.

What about collecting credit card details online and charging them offline on my handheld terminal?

Collecting and storing credit card information requires a PCI compliant server, these can be upwards of $15,000 USD/year to maintain and using anything but a PCI compliant server will invalidate your credit card processing insurance – your bank would not cover you should there be any issues/security breaches.

What needs to be done?

Quite simply the banks need to fall in line with rates offered in the rest of the market for processing fees. Only pressure from you, the customers, and the Central Bank can make this happen. 3.5% should be the mandatory maximum for any transaction. Many retailers have profit margins in single digits and simply cannot afford to take a further hit of 5 or 6% to accept credit cards so opt not to.

We have seen instances where companies request their customers to email, SMS or fax in credit card details – this is madness and carries a huge risk. We are in a digital age where this can all be done safely and SECURELY – if the banks would ease their high percentages.

Our Background

Caribbean New Media have been providing web solutions, including local payment gateways and complete eCommerce solutions for over a decade in Barbados. We continue to help businesses, small and large, to realize their online potential during these challenging times.

If you need any advice, quotes or would like to chat please feel free to contact us at info@caribbeannewmedia.com or on +1 246 249 4981.

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