Paywave fees too high says NZ Commerce Commission

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Forums › Finance and wealth management › Paywave fees too high says NZ Commerce Commission

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#3264006 24-Jul-2024 15:38

gzt: Anyone here will be super-surprised if any NZ bank really does that. If you name the bank and specific card the most likely thing that will happen imo - someone here using the exact same card will tell you you're at least partially mistaken about it.

Fair comment, however, with respect I don't believe I am mistaken.

I have re-checked my card activity and have confirmed that I have used the card twice, the first time for an online transaction which completed without any challenges, and the second time for a payment in a supermarket where contactless payment went through on the first attempt with no requirement to insert the card and enter a PIN.

The credit card I have been sent is effectively fully functional upon receipt - no need to activate it.

The letter accompanying the new card had three instructions:

1. Sign the back of your new card.
2. Your PIN is the same as your previous card.
3. Good to Go! Your new card is ready to use.

There was no instruction to activate the card.

I have a 'please explain' query lodged with the bank, as I suspect something has gone very wrong with the card issuing process.

My original post above was intended to offer a view that some card fees were to an attempt to collect funds to help with refunds for fraudulent charges caused in part by my current card reissue experience - I now fear I have hijacked this thread, so apologies, better get back on topic.

mudguard

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#3264018 24-Jul-2024 16:44

Surely I cannot be the only one. But I genuinely don't care about card fees. I just care about seeing it. I know they unbundled it so it was transparent and you could then see the surcharge but I'd rather it was back to how it was and just bundled into the price.

I tap my card or phone and sit there idly and then realise I have to confirm a surcharge. I don't care. Just price it in. But I guess we are not going back to that.

A relative just got back from a few months in the US and said it was infuriating seeing a price and going up to the counter and having the sales tax added then.

gzt

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#3264029 24-Jul-2024 18:11

geek3001: I have re-checked my card activity and have confirmed that I have used the card twice, the first time for an online transaction which completed without any challenges, and the second time for a payment in a supermarket where contactless payment went through on the first attempt with no requirement to insert the card and enter a PIN.

I'd guess the card NFC was activated by the successful on-line transaction before your store visit. Either way that remains an interesting one.

gzt

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#3264030 24-Jul-2024 18:14

mudguard: I tap my card or phone and sit there idly and then realise I have to confirm a surcharge.

I don't recall if I've seen this only for holiday surcharge or additionally as confirmation of a transaction fee. I do recall accidentally walking away from the terminal at least once after waving.

Wombat1

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#3264066 24-Jul-2024 19:57

Most times you use a card, fees are deducted, so $50 can end up being much less after several transactions, eventually the bank will end up with all of it. With cash, $50 stays $50 no matter how many times it's exchanged.

gzt

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#3264070 24-Jul-2024 20:08

Um no. Sure, a $50 note will remain unchanged as it floats around between parties. In practice each party has transaction costs even if that is just the cost of pants with pockets.

gzt

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#3264139 24-Jul-2024 21:39

Chairperson on predictability for merchants:

RadioNZ: Commerce Commission chairperson John Small "The idea here is if we push these fees right down, then the maximum surcharge that you could expect to see would be about 0.7 percent and at that point some merchants are going to say it's not worth it." Small said the commission believes there will be less surcharging and overall surcharging will be lower. "They'll also be a lot more stable because merchants will have a better understanding of what their costs are, so will card holders, 0.7 percent is the maximum you should pay."

resulting in elimination of user fees in more cases.

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Handsomedan

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#3264280 25-Jul-2024 15:25

Oh - and who do you think pays for and maintains the "free" EFTPOS network?

[Mod edit (MF): scrubbed the quoted text as the original was removed at request.

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RunningMan

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#3264283 25-Jul-2024 15:48

Handsomedan:

Oh - and who do you think pays for and maintains the "free" EFTPOS network?

The end user. Any cost of doing any business is always passed on indirectly down the chain to the final buyer/user. If costs weren't passed on somehow then the business goes out of business.

A bank may not charge for that specific service, but somewhere else a different charge would be levied that covers the cost of providing that service.

This is similar to banks saying they foot the bill if there is fraud on your credit card. It's just marketting really - I can't imagine they do it to be charitable or because they're kind, it's a business decsion and that money is recouped from other charges and fees that you and other bank customers pay. So ultimately you as the customer pay.

Not a complaint per se, just an observation.

Rmani

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#3264304 25-Jul-2024 16:22

May not be directly related to this, but payment industry in India is far ahead. Unified Payments Interface (UPI): Definition and How It Works (investopedia.com)

You can find even street vendors have QR code, so easy to pay without additional charges.

Fund transfers happen literally within seconds just with the mobile number connected to the bank account. We are just getting into 7-day banking.

Rmani

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#3264371 25-Jul-2024 18:15

tehgerbil: ...snip... The card holders bank has no risk, no skin in the game whatsoever.

But the moment you present your card, the bank is free to take a sizable chunk of money, for practically nothing in return

They are the definition of a parasite:
"A parasite is an organism that lives on or in another organism, the host, and gets its food from or at the expense of its host."...snip...

A parasite? No skin in the game? It's your bank you ring when you have a problem with your credit card, not Visa/MasterCard, and the bank's staff don't work for free. Do they take a cut that's OTT? Possibly, I don't know. But they should certainly be charging something. The amount of credit card support they provide is not insignificant.

People often mistake me for an adult because of my age.

Keep calm, and carry on posting.

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K8Toledo

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#3264382 25-Jul-2024 19:22

RunningMan:

Handsomedan:

Oh - and who do you think pays for and maintains the "free" EFTPOS network?

The end user. Any cost of doing any business is always passed on indirectly down the chain to the final buyer/user. If costs weren't passed on somehow then the business goes out of business.

I would have said "The Merchant pays".

Interesting that this thread should appear at a time when I've spoken to more than a few SMB owners in the past month about Paywave costs.

Most are paying $50 - $500 per month on Paywave transaction fees.

My question is why/how can banks charge for Paywave anyway? It seems like a convenience fee to me and unfair that the merchants should foot the bill.

RunningMan

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#3264384 25-Jul-2024 19:32

But the merchant passes that cost on to their customer as well. It may not be a direct surcharge, but it will be a cost of doing business, so factored into the pricing of whatever product or service they provide.

ANglEAUT

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#3264508 26-Jul-2024 09:04

@Rmani: ... far ahead. Unified Payments Interface (UPI): Definition and How It Works (investopedia.com)

You ...

FYI: Your link starts with read:// instead of https://

Please keep this GZ community vibrant by contributing in a constructive & respectful manner.

Handsomedan

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#3264513 26-Jul-2024 09:09

K8Toledo:

My question is why/how can banks charge for Paywave anyway? It seems like a convenience fee to me and unfair that the merchants should foot the bill.

Because contactless payments (Paywave and paypass, as well as Apple Pay and Google Pay or whatever they call it these days) all run via the Cards network, as opposed to the EFTPOS or proprietary debit channel.

Therefore there are charges - Scheme Fees, Interchange, Float etc. In fact there are masses of costs sitting under the surface - all of which are a part of doing business.
If people don't want to pay, they don't have to use the network. If they don't want the business, they don't have to pay for anything at all - stock, power, advertising, payment channels, bank fees, staff. It can all be ignored and it simply goes away if you stop trading.

BUT - if you want to trade, you need to pay for things. The fact that the payment channels are being singled out as this massive cost simply blows me away. What about the 50% mark-up on whoilesale goods? What about the exorbitant cost of power? Has anyone mentioned the increasing cost of staffing? Petrol/Diesel costs for transporting goods?
Do any of those get passed on separately? About the only one I can think of is the holiday surcharges - which I also think are an absolute joke.

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