Credit Card Surchage - Are you changing your method of payment?

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Forums › Finance and wealth management › Credit Card Surchage - Are you changing your method of payment?

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#3394789 17-Jul-2025 11:37

Bung:

That's only the interchange fee. They take many bites out of the same pie.

Interchange Fee, Transaction Fee, Acquirer Margin or Fee, Scheme Fee.

There's bound to be more.

That's crazy! So if the interchange fee gets reduced the credit card companies can just introduce new fees such as a Courtesy Fee, Electrical Fee and a Smiling While We Fleece You Fee?

snj

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#3394790 17-Jul-2025 11:42

The Commerce Commission PR statement admits it mightn't make much movement on surcharges (not surprising, Corporate & Prepaid cards remaining uncapped makes it challenging for retailers). The Reserve Bank of Australia seems to be looking at taking action on both at the same time, Reserve Bank moves to end debit and credit card surcharges and cap fees for businesses - ABC News was published the other day about this.

Unfortunately, we still seem invested in "the market will do the right thing" type of optimism which just means the issue of surcharges will just drag on for longer.

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#3394984 17-Jul-2025 16:35

MurrayM:

Bung:

That's only the interchange fee. They take many bites out of the same pie.

Interchange Fee, Transaction Fee, Acquirer Margin or Fee, Scheme Fee.

There's bound to be more.

That's crazy! So if the interchange fee gets reduced the credit card companies can just introduce new fees such as a Courtesy Fee, Electrical Fee and a Smiling While We Fleece You Fee?

The Schemes are on notice from ComCom that they cannot increase Scheme Fees to make up for the reduction in Interchange.

Many of the fees charged do have real-world application though - Margins generally pay for things like Chargeback capability, fraud detection and protection, "free" travel insurance, Airpoints or cashback etc.

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Eva888

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#3395002 17-Jul-2025 18:51

Start paying at the supermarket with a wad of cash preferably $5 notes and mention you are doing so to avoid their fees. It is legal tender after all. There’s a lot more work for a supermarket in handling cash than cards.

In fact, maybe we should have social media organised supermarket 'pay only in cash weeks' to protest for example against the cost of butter. (If Costco can do it half the price so can they). As a consumer you feel helpless to hit back so wasting their time may be an incentive.

Bung

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#3395004 17-Jul-2025 19:05

Eva888:

Start paying at the supermarket with a wad of cash preferably $5 notes and mention you are doing so to avoid their fees. It is legal tender after all. There’s a lot more work for a supermarket in handling cash than cards.

In fact, maybe we should have social media organised supermarket 'pay only in cash weeks' to protest for example against the cost of butter. (If Costco can do it half the price so can they). As a consumer you feel helpless to hit back so wasting their time may be an incentive.

Why take it out on the retailer? If I'm not in a hurry I pay by EFT pos as futile gesture to the banks.

A recent letter to editor asked how Pam's butter wasn't much more than 20 tonne wholesale rate and was wrapped etc. If Costco are cheaper than that there must be cross subsidisation going on.

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#3395105 18-Jul-2025 06:30

Bung:

A recent letter to editor asked how Pam's butter wasn't much more than 20 tonne wholesale rate and was wrapped etc. If Costco are cheaper than that there must be cross subsidisation going on.

Yup,supermarkets use “loss leader” promotions all the time to get punters in the door,

they will sell a few lines at cost or at a loss to get you in the door based on you buying other products at their full margin.

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#3395223 18-Jul-2025 08:48

Eva888:

Start paying at the supermarket with a wad of cash preferably $5 notes and mention you are doing so to avoid their fees. It is legal tender after all. There’s a lot more work for a supermarket in handling cash than cards.

In fact, maybe we should have social media organised supermarket 'pay only in cash weeks' to protest for example against the cost of butter. (If Costco can do it half the price so can they). As a consumer you feel helpless to hit back so wasting their time may be an incentive.

The supermarkets already need to do cash count, banking, etc. Having more cash in a particular day's take, doesn't really add much extra work - maybe only just a small incremental bit more work. However, it would add extra work for each and every one of the people who would be participating in the 'pay only in cash week'. i.e. every one of them would individually need to go to an ATM, withdraw lots of cash, pay in cash, deal with change 'shrapnel' etc. This would be one of the more futile protests possible.

Behodar

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#3395236 18-Jul-2025 09:15

Is it common for supermarkets to have a surcharge in the first place? Both of the ones I go to provide Paywave for "free".

Goosey

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#3395242 18-Jul-2025 09:28

Eva888:

Start paying at the supermarket with a wad of cash preferably $5 notes and mention you are doing so to avoid their fees. It is legal tender after all. There’s a lot more work for a supermarket in handling cash than cards.

In fact, maybe we should have social media organised supermarket 'pay only in cash weeks' to protest for example against the cost of butter. (If Costco can do it half the price so can they). As a consumer you feel helpless to hit back so wasting their time may be an incentive.

there’s no payWave fee in major supermarket chains and corporate fuel sites.

also, they won’t care about counting cash and pretty much all these major retailers have cash counter machines.

also, Costco do cheap butter because they tender out for suppliers to provide exclusive product, with that the dairy company is probally not making as much profit but gets the volume and also the contract to supply non branded goods and opportunities to export to other Costco stores around the world.

When people say supermarkets should be cheaper…what you are asking for is the suppliers to drop price even more. That in itself will create more pressure on jobs. Yeh, supermarkets could take less margin, but when you are looking at an average blended margin of around 8% - 20% that’s not much.

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#3395246 18-Jul-2025 09:44

Goosey:

... they won’t care about counting cash and pretty much all these major retailers have cash counter machines.

Banks do charge Cash Handling Fees when clients deposit cash.

Sometimes I just sit and think. Other times I just sit.

Bung

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#3395251 18-Jul-2025 09:57

If there’s enough cash involved usually a security firm gets paid to collect it.

I was at a riverside coffee cart in Palmerston North that had prominent no paywave signs. I asked about them and it turns out that it was run by school. The pupils decided rather than any surcharges the price of coffee would be 50c higher. It was about average so other places may be double dipping. Cash was their problem not because of handling fees but the security issues.

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#3395253 18-Jul-2025 10:19

Goosey:

When people say supermarkets should be cheaper…what you are asking for is the suppliers to drop price even more. That in itself will create more pressure on jobs. Yeh, supermarkets could take less margin, but when you are looking at an average blended margin of around 8% - 20% that’s not much.

Can you define 'blended', because on a PakNSave, Westgate, 500gm Anchor butter at $9.99, 8% margin is $0.80 profit and 20% margin is $2.00 profit.

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#3395292 18-Jul-2025 11:24

Behodar:

Is it common for supermarkets to have a surcharge in the first place? Both of the ones I go to provide Paywave for "free".

No - as a result of their massive volumes and values moved through the networks, their interchange fees are strategically lower than those of smaller retailers.

They don't surcharge because they don't need to - even if they had higher costs, they'd just add it to the cost of the weekly grocery bills.

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#3395328 18-Jul-2025 13:07

eracode:

Goosey:

... they won’t care about counting cash and pretty much all these major retailers have cash counter machines.

Banks do charge Cash Handling Fees when clients deposit cash.

that’s irrelevant, there will be a set fee as this will be happening daily.

They don’t take cash to the bank themselves, they use “cash handling companies / armoured vans”, to come empty the cash recepticals and transport to the central location where they reconcile and then do whatever they do afterwards….in bulk).

Goosey

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#3395331 18-Jul-2025 13:11

alisam:

Goosey:

When people say supermarkets should be cheaper…what you are asking for is the suppliers to drop price even more. That in itself will create more pressure on jobs. Yeh, supermarkets could take less margin, but when you are looking at an average blended margin of around 8% - 20% that’s not much.

Can you define 'blended', because on a PakNSave, Westgate, 500gm Anchor butter at $9.99, 8% margin is $0.80 profit and 20% margin is $2.00 profit.

blended is the margin accounting for no pricing promotion vs pricing promotion (and that includes any supplier pricing promotion for bulk buys vs their standard pricing)…. It’s the ups and downs… just like fuel….price is high, price is low from the supplier…so fuel station margin is blended across the highs and lows. (Keeping in mind, stock on hand might have been purchased at a higher rate, then a promotion is occurring which affects the margin for stock on hand, but meanwhile new stock comming into play at a reduced price….#9 on and so forth).

making 30c to $1 an item ain’t gonna pay the bills

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