Convenience Fee? Who is kidding who?

Forums › Spark New Zealand (including Skinny and BigPipe) › Convenience Fee? Who is kidding who?

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PolicyGuy

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#1987622 3-Apr-2018 13:46

1101:

Why would anyone pay bills with a CC ? Just asking for additional fees & charges.

Because if there is any dispute about the quality or delivery of the goods or service, the CC issuer will go in to bat on the buyer's behalf.
Because any CC purchase gets the buyer enough Air Dollars to get them several mm closer to a trip to somewhere exotic or even Palmerston North ;-)
Because it's much easier than doing a bank transfer for a single transaction.

There are lots of reasons to pay bills with a CC

tchart

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#1987627 3-Apr-2018 13:53

PolicyGuy:

1101:

Why would anyone pay bills with a CC ? Just asking for additional fees & charges.

Because if there is any dispute about the quality or delivery of the goods or service, the CC issuer will go in to bat on the buyer's behalf.
Because any CC purchase gets the buyer enough Air Dollars to get them several mm closer to a trip to somewhere exotic or even Palmerston North ;-)
Because it's much easier than doing a bank transfer for a single transaction.

There are lots of reasons to pay bills with a CC

+1, I pay as much on CC as possibe. Easier just to pay off at the end of the month than fart around making sure the cheque account is topped up with enough to cover the bills that come in a different periods (monthly vs fortnight etc).

I would think that (pretty much) guarenteed payment via CC is worth writing off the "convenience fee" (usually its just a dollar or two).

networkn

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#1987632 3-Apr-2018 13:58

Things that drive me crazy are charging a fee for paying by CC at a parking meter when it would cost a LOT more to collect cash.

cadman

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#1987690 3-Apr-2018 14:55

UHD:

I suppose Visa and MasterCard still charge their fees to the merchant for debit card usage so the company is having to pay them and therefore they must be passed on to the consumer.

That's assuming they're not getting anything for that fee. But they are. They're getting the convenience of not having to reconcile and bank cash or having to deal with bounced cheques. Accepting credit cards also encourage larger sales and impulse buys.

I said to my friends this would all start happening over a decade ago. The trouble is NZ retailers want to have their cake and eat it.

mattwnz

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#1987694 3-Apr-2018 15:02

networkn:

Things that drive me crazy are charging a fee for paying by CC at a parking meter when it would cost a LOT more to collect cash.

I guess they already have the processes and costs in place for dealing with cash. When they introduced credit card payments, that then brings in a new fee. If they were a brand new company, I suspect it could be the reverse situation. Although I have never heard of any company charging more to someone if they pay cash, and I am not sure it is even permitted. Instead you get companies that don't accept cash at all.

Starscream122

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#1987703 3-Apr-2018 15:16

@ sbiddle Not really as it’s still going over the “eftpos network” so my terminology is technically correct
And I don’t think PB Tech can leagally charge extra for credit card transactions I don’t know any other retailers that do it.

Plus I already pay a yearly fee of $36 to have a credit card account.

Am I being sneaky at PB Tech when they don't ask how I am paying and pressing the Credit Card Button without telling them (and thereby avoiding paying another 2.5%)?

KrazyKid

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#1987721 3-Apr-2018 15:42

A retailer can charge a credit card (and debit card) surcharge as long it is clear that they are doing so.

https://eftpos.co.nz/uploads/pdfs/surcharge_fee_obligations_guide.pdf

The law changed a few years ago to allow this much to the CC company objections - they don't want consumer to consider other options so they can make as much money as possible.

I believe theory is if consumers know what they are paying the competition will cause the CC merchant fees to fall. Whether this has worked is debatable (I suspect not personally)

Starscream122

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#1987725 3-Apr-2018 15:45

But why should customers that use credit cards pay more at shops when they already pay the bank a yearly fee to have a credit card?

rugrat

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#1987727 3-Apr-2018 15:49

mattwnz:

networkn:

Things that drive me crazy are charging a fee for paying by CC at a parking meter when it would cost a LOT more to collect cash.

I guess they already have the processes and costs in place for dealing with cash. When they introduced credit card payments, that then brings in a new fee. If they were a brand new company, I suspect it could be the reverse situation. Although I have never heard of any company charging more to someone if they pay cash, and I am not sure it is even permitted. Instead you get companies that don't accept cash at all.

Car registration is cheaper to pay by CC online then cash at Post Office.

That's the only case I can think of where CC payment is preferred.

If unhappy with charge, and want to insist with credit card, change ISP.

Zeon

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#1987733 3-Apr-2018 15:58

Starscream122:

Pb Tech do this at their shops. They ask if I am paying by credit card I say ''eftpos''

Sometimes they say it's credit card but they just say next time you have to pay 2.5% extra

I wonder if in the future merchants will have 2x payment terminals. One with EFTPOS only and another with credit card only and the amount sent to pay with the credit card terminal has the surcharge added on?

Speedtest 2019-10-14

mattwnz

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#1987734 3-Apr-2018 15:58

Starscream122:

But why should customers that use credit cards pay more at shops when they already pay the bank a yearly fee to have a credit card?

The shops don't get any of the fee that the customer pay the bank. The credit card company / bank get that, so it is an addon to the commission they get with each purchase on the card. Retailers providing credit card payment options get charged a commission by their merchant for accepting credit cards, anywhere up to 5%(probably at the high side) of the transaction cost. SO for a $5000 purchase, that could be up[to 250 dollars, which could be a large chuck of their margin. SO they either have to put their price up to cover that loss in margin, or charge a addon fee to cover that cost, so they are not out of pocket over it. Part of the problem I think, is that it is a percentage fee, unlike eftpos, which is a fix fee. Even though it is still just a single transaction. Imagine if banks started charging this way for eftpos transactions. Some retailers that don't charge you a credit card fee, will give you a discount if you pay cash or eftpos.

Starscream122

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#1987738 3-Apr-2018 16:02

@Zeon I hope not. but then I would most likely just line up at the line that says ''eftpos'' and use my credit card their and hope it goes though.

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