Geekzone: technology news, blogs, forums
Guest
Welcome Guest.
You haven't logged in yet. If you don't have an account you can register now.


View this topic in a long page with up to 500 replies per page Create new topic
1 | 2 | 3 | 4
727 posts

Ultimate Geek
+1 received by user: 7


  Reply # 934782 16-Nov-2013 09:56
4 people support this post
Send private message

Why is it even a percentage? The cost of processing a 1c transaction is exactly the same as processing a $1M transaction, is it not?


2740 posts

Uber Geek
+1 received by user: 451


  Reply # 934786 16-Nov-2013 10:04
Send private message

A good fixed fee precedent would be Wgtn parking using Credit cards with a 50 cent surcharge.

 
 
 
 


14631 posts

Uber Geek
+1 received by user: 2719

Trusted
Subscriber

  Reply # 934805 16-Nov-2013 10:28
Send private message

Credit cards provide fraud protection and a money back guarantee. That's probably one reason they charge a percentage. In this case I doubt the police tried to negotiate a better rate, it's like a little extra penalty.

The government switching from Westpac to another bank would be a massive job. It's not just regular banking, Westpac has done huge amounts of custom development to support the various requirements of departments and projects. I was associated with a project that had a significant amount of work done by Westpac to create a new payments system, months of work for that project alone. The cost of switching would probably be in the tens to hundreds of millions of dollars at a rough guess.

3079 posts

Uber Geek
+1 received by user: 499

Trusted
Subscriber

  Reply # 934874 16-Nov-2013 13:15
Send private message

I can't work it out. I run almost no volume each month, and Westpac charges me 2.1ish % per transaction, yet somehow the entirety of the NZ Government gets a crappier rate than my non-negotiated retail rate?!?

I guess it's just because there's no incentive for the government to ask for a better rate, because they don't have to pay it.

43 posts

Geek


  Reply # 936387 18-Nov-2013 08:12
Send private message

The percentage charged may reflect the history of losses from a customer (in this case, the police).

People paying fines are probably pretty dodgy

Mad Scientist
19986 posts

Uber Geek
+1 received by user: 2711

Trusted
Lifetime subscriber

  Reply # 937928 20-Nov-2013 14:38
Send private message

But the police says they don't keep the money (3% transaction fee all goes to westpac who by the way made more money than the government)




Swype on iOS is detrimental to accurate typing. Apologies in advance.


4079 posts

Uber Geek
+1 received by user: 1370


  Reply # 937944 20-Nov-2013 14:53
One person supports this post
Send private message

joker97: But the police says they don't keep the money (3% transaction fee all goes to westpac who by the way made more money than the government)


The police also said they received no complaints about roastbusters. 

3079 posts

Uber Geek
+1 received by user: 499

Trusted
Subscriber

  Reply # 937972 20-Nov-2013 15:51
Send private message

surfisup1000:
joker97: But the police says they don't keep the money (3% transaction fee all goes to westpac who by the way made more money than the government)


The police also said they received no complaints about roastbusters. 


No, it's actually true.  The "convenience fee" is imposed as a separate charge on your statement by either Westpac or American Express depending on how you pay.  The consequence of this is that the government (and Telecom, who do it too) don't have to pay the percentage charge on the transaction.

2074 posts

Uber Geek
+1 received by user: 461

Subscriber

  Reply # 938524 21-Nov-2013 16:44
Send private message

xarqi: Why is it even a percentage? The cost of processing a 1c transaction is exactly the same as processing a $1M transaction, is it not?


Actually, no...

There are fixed $ costs (scheme fees etc) and percentage based costs (interchange)

On top of this, there's a cost to actually provide the merchant service...it doesn't come free.

On a percentage basis, it's more expensive process a $1 transaction than it is to process a $1m transaction.






Handsome Dan Has Spoken.

727 posts

Ultimate Geek
+1 received by user: 7


  Reply # 938564 21-Nov-2013 17:47
Send private message

Handsomedan:
xarqi: Why is it even a percentage? The cost of processing a 1c transaction is exactly the same as processing a $1M transaction, is it not?


Actually, no...

There are fixed $ costs (scheme fees etc) and percentage based costs (interchange)

On top of this, there's a cost to actually provide the merchant service...it doesn't come free.

On a percentage basis, it's more expensive process a $1 transaction than it is to process a $1m transaction.



It makes no more sense for interchange fees to be a percentage of transaction cost, so that isn't much of an argument.
Merchant service, again, how does service cost depend on transaction size?

I'm not saying that isn't the way it's done, just that there is no concrete basis.
Now, if it were a matter of shifting gold bars around, or even counting money, where the effort is proportional to the value, that would make some sense, but for a purely electronic transaction, where all that happens is that numbers move from place to place, not so much.

2180 posts

Uber Geek
+1 received by user: 425

Trusted

  Reply # 938566 21-Nov-2013 17:56
Send private message

The comparison with NZTA is interesting - when they first offered the option of rego renewal (and the like) online, there was a 2-3% surcharge, meanwhile paying cash/eftpos in a post shop carried no surcharge (althogh I'm sure NZPost charges NZTA a nice transaction fee). Glad NZTA finally fixed that anomaly, perhaps Police will see the light - AFAIK credit card online payments for fines is a recent development.

Awesome
4841 posts

Uber Geek
+1 received by user: 1097

Trusted
Subscriber

  Reply # 938575 21-Nov-2013 18:18
Send private message

xarqi: Why is it even a percentage? The cost of processing a 1c transaction is exactly the same as processing a $1M transaction, is it not?


It's less about direct cost of the transaction and more about risk. When Visa/MC approve a credit transaction, they are taking on risk that it's not repaid.

Larger retailers get a better deal because the put through larger volumes, but they also are less risky. Pretty much everything in the credit world comes down to risk.

It's also related to rewards rewards programs. When you spend on your card, the merchant fee goes some way to covered the reward points the card holder may be entitled to - which obviously for a 1c vs $1m transaction is material.




Twitter: ajobbins


727 posts

Ultimate Geek
+1 received by user: 7


  Reply # 938587 21-Nov-2013 18:44
Send private message

ajobbins:
xarqi: Why is it even a percentage? The cost of processing a 1c transaction is exactly the same as processing a $1M transaction, is it not?


It's less about direct cost of the transaction and more about risk. When Visa/MC approve a credit transaction, they are taking on risk that it's not repaid.

Larger retailers get a better deal because the put through larger volumes, but they also are less risky. Pretty much everything in the credit world comes down to risk.

It's also related to rewards rewards programs. When you spend on your card, the merchant fee goes some way to covered the reward points the card holder may be entitled to - which obviously for a 1c vs $1m transaction is material.

OK - makes a bit more sense to me now, thanks.

2740 posts

Uber Geek
+1 received by user: 451


  Reply # 938592 21-Nov-2013 18:55
Send private message

ajobbins:It's less about direct cost of the transaction and more about risk. When Visa/MC approve a credit transaction, they are taking on risk that it's not repaid.

Larger retailers get a better deal because the put through larger volumes, but they also are less risky. Pretty much everything in the credit world comes down to risk.


How many fees should this risk be offset against? Isn't the unsecured nature of CC debt used to justify the 20% interest rate?

Awesome
4841 posts

Uber Geek
+1 received by user: 1097

Trusted
Subscriber

  Reply # 938598 21-Nov-2013 19:19
Send private message

Bung: How many fees should this risk be offset against? Isn't the unsecured nature of CC debt used to justify the 20% interest rate?


Welcome to the banking world and super-normal profits.

Yes, the high interest rate is also aligned to risk - but they would argue that is the ongoing risk of you continue to remain in debt (I.e. - if you pay off the debt within the period, the risk goes away).

The merchant fee at time of transaction covers risk of default in the first statement period, risk of fraud, loyalty programmes and cost of providing the service.




Twitter: ajobbins


1 | 2 | 3 | 4
View this topic in a long page with up to 500 replies per page Create new topic


Donate via Givealittle


Twitter »

Follow us to receive Twitter updates when new discussions are posted in our forums:



Follow us to receive Twitter updates when news items and blogs are posted in our frontpage:



Follow us to receive Twitter updates when tech item prices are listed in our price comparison site:





News »

Orcon announces new always-on internet service for Small Business
Posted 18-Apr-2019 10:19


Spark Sport prices for Rugby World Cup 2019 announced
Posted 16-Apr-2019 07:58


2degrees launches new unlimited mobile plan
Posted 15-Apr-2019 09:35


Redgate brings together major industry speakers for SQL in the City Summits
Posted 13-Apr-2019 12:35


Exported honey authenticated on Blockchain
Posted 10-Apr-2019 21:19


HPE and Nutanix partner to deliver hybrid cloud as a service
Posted 10-Apr-2019 21:12


Southern Cross and ASN sign contract for Southern Cross NEXT
Posted 10-Apr-2019 21:09


Data security top New Zealand consumer priority when choosing a bank
Posted 10-Apr-2019 21:07


Samsung announces first 8K screens to hit New Zealand
Posted 10-Apr-2019 21:03


New cyber-protection and insurance product for businesses launched in APAC
Posted 10-Apr-2019 20:59


Kiwis ensure streaming is never interrupted by opting for uncapped broadband plans
Posted 7-Apr-2019 09:05


DHL Express introduces new MyDHL+ online portal to make shipping easier
Posted 7-Apr-2019 08:51


RackWare hybrid cloud platform removes barriers to enterprise cloud adoption
Posted 7-Apr-2019 08:50


Top partner named at MYOB High Achievers Awards
Posted 7-Apr-2019 08:48


Great ideas start in Gisborne with hackathon event back for another round
Posted 7-Apr-2019 08:42



Geekzone Live »

Try automatic live updates from Geekzone directly in your browser, without refreshing the page, with Geekzone Live now.


Support Geekzone »

Our community of supporters help make Geekzone possible. Click the button below to join them.

Support Geezone on PressPatron



Are you subscribed to our RSS feed? You can download the latest headlines and summaries from our stories directly to your computer or smartphone by using a feed reader.

Alternatively, you can receive a daily email with Geekzone updates.