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?

alisam

837 posts

Ultimate Geek

#316302 3-Oct-2024 15:36

Probably in the last year or so, every business now wants to charge a surcharge for using a credit card. The percentages for some credit card transactions are beyond what I seem to think was a surcharge guideline of 2.5%.

I used to use my credit card for every transaction where I could.

Nowadays, I am having to ask a business if there is a credit card surcharge, because some don't tell you on a Tax Invoice. Yes, they may tell you, you can pay by direct credit or by Credit Card, but the surcharge may or may not be mentioned.

So, I have (nearly always) changed my payment method to either Cash (which I am sure businesses love) to Direct Credit. In fact, paying by cash gives me a glow of satisfaction.

Are you (slowly) changing your payment method?

Quite frankly, paying a percentage for anything irritates me e.g Credit Card, Real Estate Agent Fees, Bank Service Margin etc.

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8345 posts

Uber Geek

#3290546 3-Oct-2024 15:41

Didn't the last government promise they had fixed this ???... I guess not..

"One of the main components of merchant service fees is the interchange fee. We will cap those for credit card transactions at 0.8 %, which is in line with Australia,” David Clark said.

“We’re also capping the interchange fees charged for online debit card transactions at 0.6 %. Contactless debit card interchange fees will stay at their current levels of 0.2 % or less, and for swiped and inserted debit there will be no charge."

https://www.beehive.govt.nz/release/lower-card-fees-way-business-consumers

mattwnz

20180 posts

Uber Geek

#3290547 3-Oct-2024 15:47

If they don't charge it, they will be charging for it in their margin anyway, but it also allows some to increase their margins without putting their price up. But banks seem to be wanting their customers to move away for eftpos and into credit and debit cards, because they can cli the ticket on each transaction. It is a bit like GST, just another tax on the transaction, so as well as the government getting a %, the bank gets a % as well. Usually if I am going to be charged, I don't use credit card. Except when the amount is small and not worth the hassle of paying different.

TBH they should ban being able to charge extra for paywave like they seem to do overseas.

mattwnz

20180 posts

Uber Geek

#3290549 3-Oct-2024 15:48

wellygary:

Didn't the last government promise they had fixed this ???... I guess not..

"One of the main components of merchant service fees is the interchange fee. We will cap those for credit card transactions at 0.8 %, which is in line with Australia,” David Clark said.

“We’re also capping the interchange fees charged for online debit card transactions at 0.6 %. Contactless debit card interchange fees will stay at their current levels of 0.2 % or less, and for swiped and inserted debit there will be no charge."

https://www.beehive.govt.nz/release/lower-card-fees-way-business-consumers

They were also supposed to be bringing in a bank deposit guarantee, but years later we are still waiting. I think NZ is one of the only OECD countries without one, and the NZ one is going to be low compared to Oz, and is not adjusted for inflation each year.

alisam

837 posts

Ultimate Geek

#3290555 3-Oct-2024 16:01

I am not a mathematician.

This is what was charged on a recent purchase. It's not a lot on a relatively small amount, but heaven forbid on a large amount.

I wonder whether the Conversion Rate was or was not the official exchange rate for that day and time. Don't know.

What is wrong with a standard fixed fee? Obviously less profit for the banks.

But, if it was a fixed fee, I am sure it would be much more than the $2.03 I paid for my small transaction.

KrazyKid

1238 posts

Uber Geek

#3290562 3-Oct-2024 16:16

I always ask about surcharges if it is not clear and use and switch to EFTPOS if there is a surcharge.

Saying that, it's working as designed, before other people were subsidising my cash back credit card.
Now less people are giving me that effective discount.

Saying that most of my spending is in places that doesn't charge a surcharge regardless.
Maybe I don't eat out much?

Shindig

1587 posts

Uber Geek

Trusted

#3290565 3-Oct-2024 16:18

I will always insert my card if there is a payWave surcharge. If I was going to use CC and there is a surcharge, I will switch to cash.

The little things make the biggest difference.

cddt

1565 posts

Uber Geek

#3290567 3-Oct-2024 16:20

Definitely avoid paying a surcharge if I can avoid it...

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openmedia

3333 posts

Uber Geek

Trusted

#3290569 3-Oct-2024 16:22

I try to avoid it where possible, but for larger purchases you don't always have the cash or balance.

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richms

28215 posts

Uber Geek

Trusted

Lifetime subscriber

#3290573 3-Oct-2024 16:32

From the other side, we have had a significant reduction on the number of visa and mastercard transactions in store, and customers that have previously had us charge their card automatically have either gotten over it and signed a director guarantee to get a credit account or gone to paying by bank transfer.

All up, very successful to put the surcharge on things. Odd whine from people that have work issued credit cards or don't have any money, but for the first one, their work is paying anyway so who cares, and for those with no money, it is the cost of financing things for up to 55 days.

Richard rich.ms

mattwnz

20180 posts

Uber Geek

#3290574 3-Oct-2024 16:34

I am surprised that supermarkets I go to don't charge it. That would suggest their margins are pretty healthy to absorb that cost. But I am somewhat surprised that credit card companies don't' forbid their merchants charging a separate fee, as it discourages the use of credit cards. As long as there is a fee free way to make payment, IMO it shouldn't be that much of an issue for people.

cddt

1565 posts

Uber Geek

#3290578 3-Oct-2024 16:37

mattwnz:

I am surprised that supermarkets I go to don't charge it. That would suggest their margins are pretty healthy to absorb that cost. But I am somewhat surprised that credit card companies don't' forbid their merchants charging a separate fee, as it discourages the use of credit cards. As long as there is a fee free way to make payment, IMO it shouldn't be that much of an issue for people.

Unfortunately with some online purchases, (e.g. Air New Zealand, NZTA) the only alternative to using a credit card is POLi, which those of us who are security conscious won't ever use.

OnlineEFTPOS needs to be deployed more widely.

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richms

28215 posts

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Trusted

Lifetime subscriber

#3290580 3-Oct-2024 16:40

mattwnz:

I am surprised that supermarkets I go to don't charge it. That would suggest their margins are pretty healthy to absorb that cost. But I am somewhat surprised that credit card companies don't' forbid their merchants charging a separate fee, as it discourages the use of credit cards. As long as there is a fee free way to make payment, IMO it shouldn't be that much of an issue for people.

They used to put in the merchant agreement that you wouldn't charge a surcharge, which is why PB used to list the cash price on things as that was a discount. One of the govts made that term not legal hoping it would help reduce merchant fees because they were absurdly high.

They still are. Like most govt meddling in things, it didn't work.

Its just the "I want to pay with my watch without touching the machine" type people that seem to have the most problem because they choose not to bring their fee free option with them.

Richard rich.ms

richms

28215 posts

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Lifetime subscriber

#3290581 3-Oct-2024 16:42

cddt:

Unfortunately with some online purchases, (e.g. Air New Zealand, NZTA) the only alternative to using a credit card is POLi, which those of us who are security conscious won't ever use.

OnlineEFTPOS needs to be deployed more widely.

Govt needs to ban poli. they could start with it from their own websites. Or hopefully someone gets hacked and the banks decline compensation because of poli use and that gets media attention.

Richard rich.ms

nova

250 posts

Master Geek

Trusted

#3290584 3-Oct-2024 16:49

cddt:

Unfortunately with some online purchases, (e.g. Air New Zealand, NZTA) the only alternative to using a credit card is POLi, which those of us who are security conscious won't ever use.

I'm surprised they still allow POLi. One trick with AirNZ for multiple people is to pay with Airpoints dollars for person, and then they don't charge the credit card fee for anyone else on the booking. Handy for international flights if you are travelling with kids, and have enough to cover one person but not everyone. Plus you can still earn airpoints on the people that you pay for with the credit card.

cddt

1565 posts

Uber Geek

#3290585 3-Oct-2024 16:50

richms:

Govt needs to ban poli. they could start with it from their own websites. Or hopefully someone gets hacked and the banks decline compensation because of poli use and that gets media attention.

Agreed. Surprised it has lasted this long.

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