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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#3295062 9-Oct-2024 16:02

Jvipers2:

If we all revert back to cash and suddenly the govt notices less and less income from tax, then soon contactless/CC transactions would be without surcharge...

But how? It's not like you pay that $5 note for a coffee and it just goes into the pocket of the seller. Cash isn't really cost free, and as we go more and more electronic I think there will be a "handling" fee in the future because it's generally a PIA to deal with.

I made this point somewhere else but at a previous company I worked for, one of us would go the bank each lunchtime with all the cheques. We'd get a longer lunch hour as our reward. But that's still a handling cost for a salaried employee to disappear for an hour.

Same at the end of the each day at the coffee cart. That cash has to be counted and deposited. Which takes time and therefore money as well as the GST and whatever other obligations are required.

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#3295063 9-Oct-2024 16:11

mudguard:

Cash isn't really cost free, and as we go more and more electronic I think there will be a "handling" fee in the future because it's generally a PIA to deal with.

@mudguard Not sure what you mean. Given that it’s already been pointed out that banks charge Cash Handling Fees, do you mean retailers will charge a fee to customers who want to pay in cash? To recoup the CHF charged by their bank? Like some retailers do to recoup CC fees?

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#3295067 9-Oct-2024 16:22

I'm confused as to why people in this thread are talking about resorting to cash. I'm yet to see a brick-and-mortar store that charges transaction fee on debit cards. So if you don't want to use paywave or credit cards - debit card is the way.

The truth is of course that the credit card transaction fee is a tax on poverty; and while I feel all smug about being able to avoid it when I can and pay with a debit card, plenty of people can't do the same. Which is why it should be banned.

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#3295094 9-Oct-2024 17:20

Ultimatley, the surcharge should be allowing retailers to not add that to the selling price of their goods and instead simply charge it when people use credit cards.

The banks and card companies are the ones driving this...

mattwnz

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#3295294 10-Oct-2024 01:15

Kookoo:

I'm confused as to why people in this thread are talking about resorting to cash. I'm yet to see a brick-and-mortar store that charges transaction fee on debit cards. So if you don't want to use paywave or credit cards - debit card is the way.

The truth is of course that the credit card transaction fee is a tax on poverty; and while I feel all smug about being able to avoid it when I can and pay with a debit card, plenty of people can't do the same. Which is why it should be banned.

Don't debit cards that are issued by credit card companies also incur % fees for the merchant? Debit cards are different to eftpos.

mattwnz

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#3295295 10-Oct-2024 01:17

mudguard:

Jvipers2:

If we all revert back to cash and suddenly the govt notices less and less income from tax, then soon contactless/CC transactions would be without surcharge...

But how? It's not like you pay that $5 note for a coffee and it just goes into the pocket of the seller. Cash isn't really cost free, and as we go more and more electronic I think there will be a "handling" fee in the future because it's generally a PIA to deal with.

I made this point somewhere else but at a previous company I worked for, one of us would go the bank each lunchtime with all the cheques. We'd get a longer lunch hour as our reward. But that's still a handling cost for a salaried employee to disappear for an hour.

Same at the end of the each day at the coffee cart. That cash has to be counted and deposited. Which takes time and therefore money as well as the GST and whatever other obligations are required.

Cash these days is handled electronically by machines that count it via ATMs.

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#3295327 10-Oct-2024 09:25

mattwnz:

Kookoo:

I'm confused as to why people in this thread are talking about resorting to cash. I'm yet to see a brick-and-mortar store that charges transaction fee on debit cards. So if you don't want to use paywave or credit cards - debit card is the way.

The truth is of course that the credit card transaction fee is a tax on poverty; and while I feel all smug about being able to avoid it when I can and pay with a debit card, plenty of people can't do the same. Which is why it should be banned.

Don't debit cards that are issued by credit card companies also incur % fees for the merchant? Debit cards are different to eftpos.

Dip or swipe + PIN = no cost for debit transactions - goes through the proprietary debit network which is paid for by the banks.

Tap or online using a scheme debit card (i.e. Visa or MasterCard logo) = Merchant Service Fees (MSF). Goes through "scheme rails" i.e. Visa and MasterCard networks.

The publicly available Interchange Rates are available here (Visa) and here (Mastercard).
For Debit cards, the interchange is very low. For Credit Cards, it depends on the type of card.
The banks add a fraction of a percentage point to that interchange fee to cover things like scheme fees and costs of doing business (i.e. fraud, network charges, etc) and that makes up the MSF.

To be charged 2.5% for a debit card contactless transaction is frankly extortionate. It simply shouldn't be allowed to happen.

Oh - and if you add a surcharge, shouldn't you surcharge the surcharge, because it's now costing more? Then shouldn't you surcharge the surcharge on the surcharge?

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#3301283 25-Oct-2024 08:14

Article on Stuff today with a layperson's explanation of the fees and costs. (In as far as that's possible, seems like there's still a fair amount of smoke and mirrors.) I found it reasonably interesting and easy to understand. More to come.

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#3301294 25-Oct-2024 08:32

I wonder what the response would be if a significant number of people "went on strike" against surcharges by paying cash at any retailer imposing them? I hardly use any cash now and have started using EFTPOS where there are surcharges, but it would be easy enough to get a few hundred bucks out of an ATM every week.
The stuff article shows quite clearly that all forms of payment incur a cost, so it is illogical to single out those for credit cards.

eracode

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#3301303 25-Oct-2024 08:50

shk292: I wonder what the response would be if a significant number of people "went on strike" against surcharges by paying cash at any retailer imposing them? I hardly use any cash now and have started using EFTPOS where there are surcharges, but it would be easy enough to get a few hundred bucks out of an ATM every week.

That has crossed my mind too. However, although I'm not aware of any myself, I believe there are places that won't accept cash. (Not sure how that fits with the concept of 'legal tender'). Also the fact is that it's just so darned convenient to pay with plastic - and let's face it cash is not convenient.

I like the idea but I doubt that a 'strike' would gather much momentum. Most people will hate the surcharges and may or may not complain to the retailer but will just suck it up. Guilty of that myself and I'm a big hater.

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mudguard

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#3301313 25-Oct-2024 09:12

eracode:

That has crossed my mind too. However, although I'm not aware of any myself, I believe there are places that won't accept cash. (Not sure how that fits with the concept of 'legal tender'). Also the fact is that it's just so darned convenient to pay with plastic - and let's face it cash is not convenient.

I like the idea but I doubt that a 'strike' would gather much momentum. Most people will hate the surcharges and may or may not complain to the retailer but will just suck it up. Guilty of that myself and I'm a big hater.

It has been mentioned earlier in this thread that a retailer doesn't have to accept cash, if it's made known before the transaction. IE a sign on the door.

I can see a small retailer (say a coffee van) not accepting cash. I mean they can do all their work remotely except needing to deposit the cash in the bank. Plenty of Facebook posts say oh the cash can go round and round without incurring these fees. However I assume businesses can't just dip into the cash they've taken in to use for other expenses, I'm not sure.

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#3301324 25-Oct-2024 09:24

Someone mentioned EFTPOS charges?
Maybe I have been inattentive, but I have never seen a charge on EFTPOS.

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#3301345 25-Oct-2024 10:08

shk292: I wonder what the response would be if a significant number of people "went on strike" against surcharges by paying cash at any retailer imposing them? I hardly use any cash now and have started using EFTPOS where there are surcharges, but it would be easy enough to get a few hundred bucks out of an ATM every week.
The stuff article shows quite clearly that all forms of payment incur a cost, so it is illogical to single out those for credit cards.

Small retailers would love it as they can pocket it and write the stock off as lost. Larger ones would be indifferent, but would refuse your order if its large since AML crap makes it too much work.

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#3301346 25-Oct-2024 10:16

mudguard:

I can see a small retailer (say a coffee van) not accepting cash. I mean they can do all their work remotely except needing to deposit the cash in the bank. Plenty of Facebook posts say oh the cash can go round and round without incurring these fees. However I assume businesses can't just dip into the cash they've taken in to use for other expenses, I'm not sure.

Yes you can use the cash you have taken to pay for business expenses or pay your staff with it. That is the whole point of cash.

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#3301347 25-Oct-2024 10:18

ezbee:

Someone mentioned EFTPOS charges?
Maybe I have been inattentive, but I have never seen a charge on EFTPOS.

Certainly not in recent History,

When EFTPOS was still starting up (and machine rental costs were likely higher) you would occasionally come across minimum spend signs for this new fangled EFTPOS thing, but they have long gone the way of the dodo,

Just the same as having a small store keeper yelling to his kids out the back to get off the phone so the EFTPOS machine could connect...

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