When will paywave be mandatory ??

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Forums › Finance and wealth management › When will paywave be mandatory ??

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#1232720 7-Feb-2015 21:33

KiwiSurfer: I prefer not to use Paywave and use my old magnetic strip EFTPOS card not because I don't like the technology, in fact I think contactless payments is a *great* idea, but because it's been badly implemented in NZ (and probably elsewhere too).

I dislike that all transactions has to be processed via Visa/Mastercard even if it could be processed locally. 2% may not sound like much until you think someone spending $20,000 a year on good and services in NZ will see $400 a year going off-shore to Visa/Mastercard just for merchant's access fees to their network.

If that still doesn't sound like much, assume there are 2million working adults in NZ spending an average of $20,000 a year... Thats a potentinal total of $800,000,000 a year going to Visa/Mastercard if everyone decided to use Paywave for their daily shopping.

I can't see the point in that much money going off NZ shores to fund Visa/Mastercard's payment infrasturcture when we already have a perfectly good EFTPOS system here in NZ that will cost us (both consumers and merchants alike) far less.

I would be disappointed if all mercants were required to accept only NFC payments and I would probably switch to cash in protest if this was the case. I don't think this will happen for some time yet though.

If banks ever release a NFC card that has transactions routed via the local EFTPOS system I'll be first in line. Until then I'm sticking with my old strip card. Even the chip card would be fine when my bank eventually transitions to those.

What's wrong with Visa making money by providing a service?

My principle objection is retailers dumping it on consumers. If they want our money, they should make it easy for us and wear the cost of doing so. Amazon, Tesco, Zappos etc don't charge more to use a credit card - I'd never even encountered such a concept until I moved to NZ.

sbiddle

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#1232722 7-Feb-2015 21:37

Geektastic:

My principle objection is retailers dumping it on consumers. If they want our money, they should make it easy for us and wear the cost of doing so. Amazon, Tesco, Zappos etc don't charge more to use a credit card - I'd never even encountered such a concept until I moved to NZ.

You can thank the Commerce Commission.

nate

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#1232728 7-Feb-2015 22:10

My cafe accepts paywave/paypass, and we've done so since I could first get support for it from my merchant provider. It's for this reason I think it's madness to own an eftpos terminal. Technology changes so quickly, there's no point in purchasing (IMO).

I can also understand why the supermarkets disable it. I hate paying merchant fees, however electronic transactions are the lions share of what we do (only 9% is cash). I'm just lucky most of my transactions are plain eftpos, so the fee isn't too high.

One issue we still keep seeing is customers still have no idea what the technology is, or even how to use it. The banks really have done a shite job at informing the public.

KiwiSurfer

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#1232748 7-Feb-2015 22:54

Thanks nate, it's nice to see a merchant's perspective. I am not too surprised at your 9% cash figure because it is NZ after all. I am interested to know approx how much you pay in merchant fees for Visa/MC/Amex -- is it as high as the 2% I've often seen quoted or is it lower than that?

Out of the 91% that pay by electronic means, what % would you guess is EFTPOS vs Visa/MC/Amex?

richms

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#1232750 7-Feb-2015 22:56

Generally merchant fees are confidential and cant be disclosed. I know that my last works ones certainly were.

They make it up from a random number generator it seems.

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#1232752 7-Feb-2015 23:04

My principle objection is retailers dumping it on consumers. If they want our money, they should make it easy for us and wear the cost of doing so. Amazon, Tesco, Zappos etc don't charge more to use a credit card - I'd never even encountered such a concept until I moved to NZ.

Those are massive companies that will have the buying power to have negotiated themselves a much sweeter deal.

tdgeek

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#1232754 7-Feb-2015 23:09

nate: My cafe accepts paywave/paypass, and we've done so since I could first get support for it from my merchant provider. It's for this reason I think it's madness to own an eftpos terminal. Technology changes so quickly, there's no point in purchasing (IMO).

I can also understand why the supermarkets disable it. I hate paying merchant fees, however electronic transactions are the lions share of what we do (only 9% is cash). I'm just lucky most of my transactions are plain eftpos, so the fee isn't too high.

One issue we still keep seeing is customers still have no idea what the technology is, or even how to use it. The banks really have done a site job at informing the public.

I think thats the key.

Many users do not follow EFTPOS, contactless. They see the new things as "wow, I don't understand that" which defaults to "keep away from that".

Go back years and years. Everyone had cash. Pounds, pence, dollars, and cents. (Excuse the rhyme) Now, many have little or no cash, EFTPOS and CC rules, but many are stuck in the old regime, and its not just the elders. One day, anything other than contactless will be WTF. Not at the moment. Many relate to tangibles, IT is not tangible to many still.

EDIT: had to change Nate's post of sh*ite to site. Your a mod, you got past that??:-)

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coffeebaron

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#1232755 7-Feb-2015 23:10

A lot of smaller merchant's typically pay 3-5% to VISA / MasterCard.

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nate

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#1232766 8-Feb-2015 00:03

coffeebaron: A lot of smaller merchant's typically pay 3-5% to VISA / MasterCard.

When we started, we were close to that. We are still close to that for AMEX.

I'm not sure if I can disclose the current rate but it's much less. It's taken years of nagging at the bank plus a decent volume to get the percent down.

This is the break down of our transactions for the last four years:

(I generated this from a database of every Paymark transaction we've ever done. Every day Paymark send us a CSV file of all the eftpos transactions. I have a script which takes that csv file, and imports it into a MSSQL database, just in case I ever need it)

Also for the record, mods aren't subject to the swear word filter ;)

roobarb

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#1232770 8-Feb-2015 00:25

sdavisnz: Would love to be able to use Apple pay in nz.....

You can, the PayPass/PayWave terminals support it, you just need an American credit card account..

nakedmolerat

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#1232775 8-Feb-2015 01:03

I haven't withdraw cash for donkey years in NZ (only when I am overseas, I do withdraw cash)...

If the shop does not accept eftpos/card, I left without buying anything.

If the shop accept eftpos but not card, if less than $100, I will pay by eftpos. More than that, I just left.

If the shop accept card but trying to charge whatever extra percent (eg PBtech), I don't bother going there anymore.

Now that I just carry my paytag (no more wallet) - I keep track of the shops that accept this in town. That 2-3% extra maybe worth it if the customers keep coming back to you.

jarledb

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#1232781 8-Feb-2015 02:04

From what I understand the average margin on groceries are very slim, so having to pay around 2% transaction fee would mean you are basically giving the groceries away. Thats why you won't see any of the big grocery chains accepting credit cards or paywave.

The merchant fee is usually based on volume and the risk of fraud. If you sell items that are easily fenced you will be paying a much higher merchant fee than if you sell products that nobody could give away if they wanted to.

I have seen merchant fees around 1.25% (don't know about NZ, this was in Norway). So it certainly is possible to get them lower than 2-3%.

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richms

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#1232782 8-Feb-2015 03:07

They already take paywave on credit cards. Its just debit cards that they are blocked on.

Depending on the time of the month, I may not have enough space on the credit card to put grocerys on it, so often use my debit card when shopping at countdown. Sucks to have to put it in the machine. Need the pin anyway since its seldom under $80 if I am getting groceries. And have to put the pin in on the stupid mounted pin pad that is so high up that anyone in the store can see what you are doing unless you go all cover it up with the other hand and look like a paranoid person.

Richard rich.ms

kingjj

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#1232787 8-Feb-2015 07:27

jarledb: From what I understand the average margin on groceries are very slim, so having to pay around 2% transaction fee would mean you are basically giving the groceries away. Thats why you won't see any of the big grocery chains accepting credit cards or paywave.

I can't think of a single Supermarket in Chch that doesn't support Credit Cards and I could only name one I regularly shop at that doesn't support PayWave. Just this morning I made a $4.14 purchase using PayWave at Countdown.

MikeB4

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#1232791 8-Feb-2015 07:46

sdavisnz:
richms: Before they worry about paypass being everywhere, I want all the terminals where you have to hand your card over gone. I intentionally hand over my worn out swipe card that needs to be swiped backwards thry some terminals to read to places that insist on not using a terminal with the card going in on the customer half of the machine.

Agree - in 2015 a retailer should not have the right to hold my debit card in their hands..

I refuse to hand my card to anyone be it eft pos or credit card. If I cannot do it myself I walk from the retailer.

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