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  # 1012765 25-Mar-2014 21:34
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I'm puzzled why Vodafone hasn't been able to negotiate a lower credit card transaction fee than my local mum and dad shop.

One is a multi million dollar company the other is barely breaking even...but still paying the same 2% ?

I wonder if their electricity kW/hr they are paying is the same as me too ?

A.

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  # 1012829 25-Mar-2014 23:38
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afe66: I'm puzzled why Vodafone hasn't been able to negotiate a lower credit card transaction fee than my local mum and dad shop.

One is a multi million dollar company the other is barely breaking even...but still paying the same 2% ?

I wonder if their electricity kW/hr they are paying is the same as me too ?

A.


Simple, really.  They don't have to pay the transaction fee - the processor charges it to you directly.  What incentive does Vodafone have to go to bat to save you money when it doesn't save them money?

(Vodafone, this is your opportunity to prove me wrong and say "yes!  We're sorry that we can't continue to absorb this cost, but we've heard you, and we're working really hard to get you all a more acceptable surcharge on credit card transactions".  Or, keep on treating the customers with disdain.  Telecom, you too.  2degrees, keep up that non-credit-card-surcharging goodness).

 
 
 
 


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  # 1013161 26-Mar-2014 13:45
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Kyanar:
afe66: I'm puzzled why Vodafone hasn't been able to negotiate a lower credit card transaction fee than my local mum and dad shop.

One is a multi million dollar company the other is barely breaking even...but still paying the same 2% ?

I wonder if their electricity kW/hr they are paying is the same as me too ?

A.


Simple, really.  They don't have to pay the transaction fee - the processor charges it to you directly.  What incentive does Vodafone have to go to bat to save you money when it doesn't save them money?

(Vodafone, this is your opportunity to prove me wrong and say "yes!  We're sorry that we can't continue to absorb this cost, but we've heard you, and we're working really hard to get you all a more acceptable surcharge on credit card transactions".  Or, keep on treating the customers with disdain.  Telecom, you too.  2degrees, keep up that non-credit-card-surcharging goodness).


It's not like you are being forced to pay a surcharge - there are other ways to not pay it.

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  # 1013294 26-Mar-2014 16:58
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bagheera:
Geektastic: As a comparable (sort of) I just stayed in an Accor Group hotel in Auckland. 

The standard fee they charge for credit card payment of bills is 1.5%.

I am personally not in favour of separating these charges from the cost of doing business but if it is going to happen, the 'convenience fee' smacks of a bit of free money making when compared to 'passing on costs imposed on us by the bank'. Even that is dodgy of course, since banks charge for pretty much everything in a business account, so VF (or anyone else doing this) are not passing on those other charges other than as a cost of doing business.


total agree with you on that, when where i worked at look at total cost to collect money for people paying there bills, the most expensive was cash, what with checking the teller cash match, on site security to store cash, and to then get the cash off site to the bank, then it was credit card payment on-site, online banking - due to time wasted by someone matching wrong ref# to payments - you be surprise how many people can get that wrong, then eftpos payment onsite, then the cheapish method (by a long way) was on-line payment with credit card as the person filling in the form is free, only cost was some power for the servers, cost of the server, internet (most of which was already getting paid for any way) and 2% CC fee, so they decided not to pass it on the customer as they WANTED people to use the online portal as it was a big cost saving for them.


That is a more normal approach, I would say. Better if we had a law like California that prohibits surcharges for using what is probably the most common form of payment now in developed nations.
 
Whilst researching this subject I did come across this news report from the tail end of last year from UK paper The Guardian; the quote at the end from the OFT is interesting. (approximately double the numbers to convert to NZ$)

"Shoppers are still being stung by high debit and credit card fees six months after a ban on "excessive" surcharges came into force, according to a consumer group.

In April, the government moved to end high additional fees typically added when consumers book a range of items from flights to concert tickets, hotel rooms to hire cars, with rules stating that traders must make sure charges reflect the actual cost of processing the payment.

However, Which? said some companies are still charging excessive fees, with the worst offenders in the travel and holiday sector, after it received hundreds of reports from consumers.

It said cheap flight site eDreams was the worst offender, with examples of surcharges of more than 18% for customers paying by card. For example, for a return flight from London to Rome advertised as £93.21, £17.56 was added for paying by Visa or Mastercard credit cards. These surcharges were labeled as "service charges and payment fees".

Which? also found that easyBus, Vueling, Monarch, Jet2 and Germanwings were charging fees ranging from 2.5%-3.5%. The consumer group says charges should be no more than 2% for credit cards and a matter of pence for debit cards.

According to the Office of Fair Trading (OFT), someone spending £100 on a travel ticket could expect to be charged 53p extra if using a debit card, or £2.10 if using a credit card."





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  # 1013458 26-Mar-2014 22:03
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MaxLV:
Jaxar: I can't say that I'm impressed by this change. VF should be driving people towards self service not putting disincentives in place. Why not make the support number 0900 as well it costs VF to have people answering calls. It is only fair that they pass this on?


Self service? Try Internet Banking. (as JohnR points out, all you pay is your monthly bill)

Vodafone like ALL companies that accept card payments are being charged by MasterCard and Visa (credit cards and debit cards with the MasterCard/Visa logo) and they're just passing on the cost to you because *YOU* choose to pay your bill with a MasterCard/Visa provided service.


So why don't they charge it on variable direct debit credit card payment. They still pay the merchant fee on those payments and it is essentially hypocrisy to charge on one-off payments but not on merchant-initiated direct debit Credit card transaction. There can only be two reasons for this - they want authority to bill your card variable amounts (which when incorrect may not be noticed and hence not disputed) or they are trying to reduce their merchant service fee percentage by keeping average transaction amount up. (Some merchant agreements base fee at least partly on average transaction amount). If the reason is the latter then they should make payments of say more than $100 exempt from fee.

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  # 1013464 26-Mar-2014 22:07
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drajk:
MaxLV:
Jaxar: I can't say that I'm impressed by this change. VF should be driving people towards self service not putting disincentives in place. Why not make the support number 0900 as well it costs VF to have people answering calls. It is only fair that they pass this on?


Self service? Try Internet Banking. (as JohnR points out, all you pay is your monthly bill)

Vodafone like ALL companies that accept card payments are being charged by MasterCard and Visa (credit cards and debit cards with the MasterCard/Visa logo) and they're just passing on the cost to you because *YOU* choose to pay your bill with a MasterCard/Visa provided service.


So why don't they charge it on variable direct debit credit card payment. They still pay the merchant fee on those payments and it is essentially hypocrisy to charge on one-off payments but not on merchant-initiated direct debit Credit card transaction. There can only be two reasons for this - they want authority to bill your card variable amounts (which when incorrect may not be noticed and hence not disputed) or they are trying to reduce their merchant service fee percentage by keeping average transaction amount up. (Some merchant agreements base fee at least partly on average transaction amount). If the reason is the latter then they should make payments of say more than $100 exempt from fee.


Yes that was a point I made earlier. Plus, AFAICT, debit cards are not charged the same fees as credit cards (many operations do not surcharge Debit cards which are really just Visa-badged Eftpos card in essence) so I'm not sure why VF are treating them as the same thing.





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  # 1013573 27-Mar-2014 01:16
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Geektastic:
drajk:
MaxLV:
Jaxar: I can't say that I'm impressed by this change. VF should be driving people towards self service not putting disincentives in place. Why not make the support number 0900 as well it costs VF to have people answering calls. It is only fair that they pass this on?


Self service? Try Internet Banking. (as JohnR points out, all you pay is your monthly bill)

Vodafone like ALL companies that accept card payments are being charged by MasterCard and Visa (credit cards and debit cards with the MasterCard/Visa logo) and they're just passing on the cost to you because *YOU* choose to pay your bill with a MasterCard/Visa provided service.


So why don't they charge it on variable direct debit credit card payment. They still pay the merchant fee on those payments and it is essentially hypocrisy to charge on one-off payments but not on merchant-initiated direct debit Credit card transaction. There can only be two reasons for this - they want authority to bill your card variable amounts (which when incorrect may not be noticed and hence not disputed) or they are trying to reduce their merchant service fee percentage by keeping average transaction amount up. (Some merchant agreements base fee at least partly on average transaction amount). If the reason is the latter then they should make payments of say more than $100 exempt from fee.


Yes that was a point I made earlier. Plus, AFAICT, debit cards are not charged the same fees as credit cards (many operations do not surcharge Debit cards which are really just Visa-badged Eftpos card in essence) so I'm not sure why VF are treating them as the same thing.


Thank you this is just the point I have brought so many times in the last few pages. Debit card is NOT credit so paying a fee for your own money makes no sense.




Sid

 
 
 
 


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  # 1013599 27-Mar-2014 08:33
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What I've been mildly curious about is this, from a post-paid, variable-credit-card charge, account:

19 Mar 2014 VODAFONE POSTPY VISA MC AUCKLAND $57.35
19 Mar 2014 VF CARD CONVENIENCE AUCKLAND $1.14

Haven't had time to call VF and ask what happened.

Geektastic: As a comparable (sort of) I just stayed in an Accor Group hotel in Auckland. 

The standard fee they charge for credit card payment of bills is 1.5%.

I am personally not in favour of separating these charges from the cost of doing business but if it is going to happen, the 'convenience fee' smacks of a bit of free money making when compared to 'passing on costs imposed on us by the bank'. Even that is dodgy of course, since banks charge for pretty much everything in a business account, so VF (or anyone else doing this) are not passing on those other charges other than as a cost of doing business.

I agree with you on this. I find this most frustrating in the travel sector as I travel quite a bit and there's no practical way to pay for travel expenses other than a credit card. I've often wondered what some hotels would do if I said "oh, okay - 1.5% on credit card fees. Here's my traveler's cheques...". We have in some cases moved our travel expenditure away from hotels that charge the 1.5% fee (or asked for a 1.5% discount on our current negotiated rates) given our volume of expenditure. There's a reason that corporate cards are often referred to as T&E cards, so it seems totally absurd to me that the travel industry has gone down this path in some parts of the world.

Geektastic: Yes that was a point I made earlier. Plus, AFAICT, debit cards are not charged the same fees as credit cards (many operations do not surcharge Debit cards which are really just Visa-badged Eftpos card in essence) so I'm not sure why VF are treating them as the same thing.

sidders80: Thank you this is just the point I have brought so many times in the last few pages. Debit card is NOT credit so paying a fee for your own money makes no sense.

This is not quite correct. A debit card that is processed as a credit card transaction (which a card not present transaction would be) is charged a card interchange fee. To use ASB's website as an example: https://www.asb.co.nz/personal/current-domestic-interchange-fees-for-asb-issued-cards shows that a Visa debit card is charged 1.25% for a "standard rate", while Visa cards range between 0.85% (electronic for Classic/Gold) to 2.00% (Visa Business). Then add any other acquirer costs on.

I'd assume Vodafone would come under 'strategic merchant' or 'utilities'.

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  # 1014915 28-Mar-2014 23:10
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PenultimateHop: What I've been mildly curious about is this, from a post-paid, variable-credit-card charge, account:

19 Mar 2014 VODAFONE POSTPY VISA MC AUCKLAND $57.35
19 Mar 2014 VF CARD CONVENIENCE AUCKLAND $1.14

Haven't had time to call VF and ask what happened.

Geektastic: As a comparable (sort of) I just stayed in an Accor Group hotel in Auckland. 

The standard fee they charge for credit card payment of bills is 1.5%.

I am personally not in favour of separating these charges from the cost of doing business but if it is going to happen, the 'convenience fee' smacks of a bit of free money making when compared to 'passing on costs imposed on us by the bank'. Even that is dodgy of course, since banks charge for pretty much everything in a business account, so VF (or anyone else doing this) are not passing on those other charges other than as a cost of doing business.

I agree with you on this. I find this most frustrating in the travel sector as I travel quite a bit and there's no practical way to pay for travel expenses other than a credit card. I've often wondered what some hotels would do if I said "oh, okay - 1.5% on credit card fees. Here's my traveler's cheques...". We have in some cases moved our travel expenditure away from hotels that charge the 1.5% fee (or asked for a 1.5% discount on our current negotiated rates) given our volume of expenditure. There's a reason that corporate cards are often referred to as T&E cards, so it seems totally absurd to me that the travel industry has gone down this path in some parts of the world.

Geektastic: Yes that was a point I made earlier. Plus, AFAICT, debit cards are not charged the same fees as credit cards (many operations do not surcharge Debit cards which are really just Visa-badged Eftpos card in essence) so I'm not sure why VF are treating them as the same thing.

sidders80: Thank you this is just the point I have brought so many times in the last few pages. Debit card is NOT credit so paying a fee for your own money makes no sense.

This is not quite correct. A debit card that is processed as a credit card transaction (which a card not present transaction would be) is charged a card interchange fee. To use ASB's website as an example: https://www.asb.co.nz/personal/current-domestic-interchange-fees-for-asb-issued-cards shows that a Visa debit card is charged 1.25% for a "standard rate", while Visa cards range between 0.85% (electronic for Classic/Gold) to 2.00% (Visa Business). Then add any other acquirer costs on.

I'd assume Vodafone would come under 'strategic merchant' or 'utilities'.


Unless they have the wrong MCC, you would be correct.  Which means the interchange rate on a payment to Vodafone is 0.7% maximum, and there is no way in hell the acquirer margin should be 1.3%.  Customers are getting shafted because Vodafone (and Telecom too!  Wait, no, Telecom is 2.5% which is even worse again) is too lazy to spend the time to negotiate a better rate.  After all, they don't have to pay it any more so why do they care?

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  # 1014919 28-Mar-2014 23:26
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Kyanar:
PenultimateHop: What I've been mildly curious about is this, from a post-paid, variable-credit-card charge, account:

19 Mar 2014 VODAFONE POSTPY VISA MC AUCKLAND $57.35
19 Mar 2014 VF CARD CONVENIENCE AUCKLAND $1.14

Haven't had time to call VF and ask what happened.

Geektastic: As a comparable (sort of) I just stayed in an Accor Group hotel in Auckland. 

The standard fee they charge for credit card payment of bills is 1.5%.

I am personally not in favour of separating these charges from the cost of doing business but if it is going to happen, the 'convenience fee' smacks of a bit of free money making when compared to 'passing on costs imposed on us by the bank'. Even that is dodgy of course, since banks charge for pretty much everything in a business account, so VF (or anyone else doing this) are not passing on those other charges other than as a cost of doing business.

I agree with you on this. I find this most frustrating in the travel sector as I travel quite a bit and there's no practical way to pay for travel expenses other than a credit card. I've often wondered what some hotels would do if I said "oh, okay - 1.5% on credit card fees. Here's my traveler's cheques...". We have in some cases moved our travel expenditure away from hotels that charge the 1.5% fee (or asked for a 1.5% discount on our current negotiated rates) given our volume of expenditure. There's a reason that corporate cards are often referred to as T&E cards, so it seems totally absurd to me that the travel industry has gone down this path in some parts of the world.

Geektastic: Yes that was a point I made earlier. Plus, AFAICT, debit cards are not charged the same fees as credit cards (many operations do not surcharge Debit cards which are really just Visa-badged Eftpos card in essence) so I'm not sure why VF are treating them as the same thing.

sidders80: Thank you this is just the point I have brought so many times in the last few pages. Debit card is NOT credit so paying a fee for your own money makes no sense.

This is not quite correct. A debit card that is processed as a credit card transaction (which a card not present transaction would be) is charged a card interchange fee. To use ASB's website as an example: https://www.asb.co.nz/personal/current-domestic-interchange-fees-for-asb-issued-cards shows that a Visa debit card is charged 1.25% for a "standard rate", while Visa cards range between 0.85% (electronic for Classic/Gold) to 2.00% (Visa Business). Then add any other acquirer costs on.

I'd assume Vodafone would come under 'strategic merchant' or 'utilities'.


Unless they have the wrong MCC, you would be correct.  Which means the interchange rate on a payment to Vodafone is 0.7% maximum, and there is no way in hell the acquirer margin should be 1.3%.  Customers are getting shafted because Vodafone (and Telecom too!  Wait, no, Telecom is 2.5% which is even worse again) is too lazy to spend the time to negotiate a better rate.  After all, they don't have to pay it any more so why do they care?


Doesn't the merchant have to also pay the payment gateway provider on top of the bank fees. E.g. PayPal charge something like 2.4% for accepting credit card payments online.

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  # 1014943 29-Mar-2014 09:03
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NonprayingMantis: 

Doesn't the merchant have to also pay the payment gateway provider on top of the bank fees. E.g. PayPal charge something like 2.4% for accepting credit card payments online.


Real gateways charge a fixed amount per transaction.  For DPS/PaymentExpress, it's 50c.  That's probably less than the cost of processing an incoming direct credit.  PayPal is a bad example as they aren't a real processor.

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  # 1014945 29-Mar-2014 09:23
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Kyanar:
NonprayingMantis: 

Doesn't the merchant have to also pay the payment gateway provider on top of the bank fees. E.g. PayPal charge something like 2.4% for accepting credit card payments online.


Real gateways charge a fixed amount per transaction.  For DPS/PaymentExpress, it's 50c.  That's probably less than the cost of processing an incoming direct credit.  PayPal is a bad example as they aren't a real processor.


So is that on top on the bank fee? I.e. Are Vf paying 50c plus the interchange fee of 0.7%?

if the average bill is say, $50, then that 50c represents another 1% effective cost.

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  # 1015538 30-Mar-2014 18:39
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An interesting and somewhat relevant case where Visa and Mastercard got done for price fixing here


Also, Walmart opted out of the settlement and have just filed a separate action.





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  # 1015690 30-Mar-2014 21:32
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Geektastic: An interesting and somewhat relevant case where Visa and Mastercard got done for price fixing here


Also, Walmart opted out of the settlement and have just filed a separate action.


Not really.  That exercise already happened here, and is the very reason that you can now be charged surcharges on credit card transactions - the Commerce Commission held that it was unlawful to forbid merchants from passing on the credit card commission (among other things - banks were also forbidden from forcing merchants to pay blended rate, and were required to offer Interchange Plus as an option even to smaller merchants).  Thanks Commerce Commission, sticking up for... er, not the public, actually.

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  # 1016095 31-Mar-2014 16:50
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Kyanar:
Geektastic: An interesting and somewhat relevant case where Visa and Mastercard got done for price fixing here


Also, Walmart opted out of the settlement and have just filed a separate action.


Not really.  That exercise already happened here, and is the very reason that you can now be charged surcharges on credit card transactions - the Commerce Commission held that it was unlawful to forbid merchants from passing on the credit card commission (among other things - banks were also forbidden from forcing merchants to pay blended rate, and were required to offer Interchange Plus as an option even to smaller merchants).  Thanks Commerce Commission, sticking up for... er, not the public, actually.


That is not what the story is about though. It's about Visa and Mastercard colluding to ensure the fees remain too high.





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