Retailers Criticize New Lightspeed Program
Some bike sellers are unhappy with Lightspeed's new program, which combines payment processing and point-of-sale software. They have to use both services or pay a lot of money if they want to stay with their current POS system. Lightspeed says the new program is better and comparable in price to other options.
Kitty Monsalud, who co-owns Bike Attack in Southern California, is unhappy. Switching the POS system is hard. Lightspeed told her to choose by June 1: either pay $69 per month for the new system, or pay $560 per month to keep the current processor with Lightspeed POS. Monsalud called this "blackmail".
Monsalud thinks merchant processing costs are confusing. Each month's bill has 200 items with different prices. She asked Lightspeed to send her a detailed price and compare it to her merchant prices. She's still waiting for a reply.
The prices for Lightspeed subscriptions and transactions are different. A retailer said his fee will be $602 per month if he uses third-party processing. This fee includes a $202 subscription fee and $400 in transaction fees from June 1. If he uses the unified system, his fee will only be $138 every month.
Some retailers don't mind paying more for Lightspeed's payment processing system because they think the fees are fair. However, they don't like that they weren't given much time to make a decision about switching to a new system. They feel like they're being forced to give up their current payment processor.
Krista McKenna from Meridian Cycles in Idaho stated in an email to BRAIN that they haven't checked out their programs yet.
They are making us do this. Our merchant services company is great. They started in our area, moved to Seattle, and the CEO treats employees well. We want to keep supporting them.
As soon as she got the letter, McKenna started searching for other POS options apart from Lightspeed.
Lightspeed revealed a new program on May 1. The announcement came from the firm's president, JD St-Martin, in a letter on their website.
St-Martin's letter said that we are at a crucial point for big changes. The worlds of payments and commerce are coming together quickly since 2020. Before, we had many different systems that needed to work together but now we are seeing more and more complete solutions with everything included.
The letter said Lightspeed maintains two systems. One uses third-party payment systems. The other uses Lightspeed's own system.
Providing two options has issues and is slowing down progress. To make significant changes to how you operate, we need to prioritize one option. Therefore, we will concentrate on Lightspeed Payments because we see more benefits in the long run than problems in switching providers.
Lightspeed has developed a new payment system. Retailers can benefit from this system. They can enjoy easy payment processing and shorter checkout times. Retailers can also get real-time data about their transactions. The system is connected with Lightspeed's inventory management system. Hence, retailers can manage their sales and customer data easily.
In the letter from St-Martin, they said that Lightspeed's payment processing is better than competitors 70% of the time.
A retailer got a fixed rate. The rate was 2.60% + 0.10. It applied to all card types.
BRAIN asked Lightspeed's media department about the change. They gave a FAQ about it. Lightspeed also said that they told customers 30 days in advance. Customers had to move to Lightspeed Payments.
The representative spoke to BRAIN. Change is hard. They want to help customers. The goal is to make the transition easy.
Lightspeed's FAQ states that new customers can only use the unified system and not a third-party processor. To make the transition smoother, Lightspeed is providing free payment terminals for each register, buying out contracts to cover termination fees from existing processors, offering free on-site installation, and matching or beating competitors' processing rates.
