From 20 September, all businesses offering services are legally obligated to accept credit card payments, but smaller retailers are asking the authorities for some ‘slack’ due to increased operating costs.
From kiosks to plumbers and lawyers, all retail businesses and services in Cyprus must accept card payments, with a law coming into effect from 20 September.
Businesses should establish wireless and wired POS, mobile POS and virtual POS terminals and accept card payment from Visa, Mastercard, Maestro and UnionPay.
In comments to the Financial Mirror, the general secretary of the small shopkeepers’ association POVEK, Stephanos Koursaris, said Cyprus should enforce the legislation, but small enterprises should be given some ‘leeway’.
Koursaris argued from 20 September, making it compulsory for all retailers and service providers to accept credit cards will ramp up operating costs amid a crisis fuelled by the coronavirus outbreak.
He said small businesses such as kiosks, whose customers pop in to buy a couple of items at a time, will suffer the most.
“With the mandatory acceptance of the credit card, tiny profit margins will disappear, making small businesses unprofitable.
“The profit margin for some products such as cigarettes, phone cards, milk, newspapers, and magazines is negligible.”
POVEK is waiting for Finance Minister Constantinos Petrides to respond to their call to meet and examine their demand to allow retailers to sell certain items for cash only.
It proposes the law be amended to allow retailers the right not to accept credit cards for purchases under €10.
Koursaris said that small shopkeepers would also be meeting with credit card clearance companies to reduce costs for all small businesses.
The law obligating retailers to accept plastic money as payment was passed over a year ago, with the Finance Ministry issuing a decree in late June this year.
By making credit card payments compulsory, Cyprus aligned its national legislation with EU directives.
The European Directive on the provision and use of payment services and access to payment systems states that “no charge shall be levied on the use of means of payment to which interbank charges apply”.
New businesses launched from June onwards will be given until 20 October to comply with the law.
According to reports, from October, Tax Department officers will begin auditing businesses to determine whether they accept credit cards as a means of payment.
The law stipulates that companies refusing to accept credit cards will be subject to a fine of up to €2,000.