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  # 2206940 29-Mar-2019 12:01
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landcruiserguy:

 

Screw Visa and their 3% tax so I use good old Eftpos whenever possible.  Apple pay is even worse - 5%.

 

 

Everything you just said is total hogswash. Apple Pay, Android Pay, Samsung Pay and Garmin Pay have no higher interchange fee than any other credit card transaction, and as they are contactless are actually cheaper than a swipe or insert.

 

The talk in the media that contactless is an "extra 2% tax" is crap. Contactless transactions are actually cheaper to the merchant provided they're on Interchange Plus pricing, at 0.50% for Contactless Credit Mastercard (vs 1.40% to 2.05% for swiped or inserted Consumer Credit Mastercards); $0.004 (yes, 0.4 cents) for Contactless Debit Mastercard under $15, and between $0.06 and 0.40% for higher Contactless Debit Mastercard transactions; from 0.85% to 1.57% for Contactless Visa Credit (vs 1.25% to 1.97% for swiped or inserted - basically Contactless is a 0.40% discount); and 0.30% for all Visa Debit transactions including Contactless (makes sense now why all the banks switched to Mastercard debit huh...).

 

What the merchant pays their bank will usually include either a % increase over these rates (interchange plus) or will be the same for all types of transactions (blended).

 

Banks used to push blended because the idea for the merchant is they'd pay 1.5% for all transactions even though the highest rate is 2.20% (Commercial Credit Mastercard - I've deliberately excluded the international cards as they are charged differently). Of course, most people didn't have platinum cards back then so for your average dairy they lost out big time on that, and when debit cards started replacing EFTPOS they got screwed on it if people selected credit or - I dunno - tapped it.

 

The problem is that people want contactless - it's convenient and it's fast (same can't be said for inserted EFTPOS...) - but there is no contactless EFTPOS application, so when a card is tapped the only networks that can switch the transaction is either VisaNet, Mastercard, Diners Club (The Warehouse, also switch Discover), American Express (also switch JCB) or UnionPay. To solve this, two things need to happen. First, EFTPOS needs to develop a contactless application that can be installed on cards. Second, banks and acquirers need to enable Least Cost Routing to enable merchant terminals to switch the transaction on the network with the lowest cost of acceptance. Basically that means the terminal will authorise the transaction with the card, see that it has the EFTPOS application installed and send the transaction automatically over the cheaper EFTPOS network.

 

The reason that won't work is that unlike in Australia where every eftpos transaction switched by EPAL (eftpos Payments Australia Limited) incurs a $0.15 fee, transactions switched by Paymark incur no fees (which is why merchants like EFTPOS). As a result, Paymark operates off much lower budgets than EPAL, and cannot afford to invest in technologies like contactless (I've asked them - they've basically said "yeah nah not happening, but look how great online EFTPOS is?!?")

 

surfisup1000:

 

Banks are disgusting....they take a 2% cut from merchants who work hard and risk so much. Banks assume no risk. 

 

 

False. Liability shift occurs on more transactions than you think. Online for example, if the merchant attempts 3DSecure (Verified By Visa or Mastercard Securecode) then if the cardholder disputes the transaction because they claim it wasn't them the issuer eats the cost (not the merchant). For transactions in store or at an ATM, the liability falls on the issuer (not merchant) as well, unless the issuer supports EMV and the merchant does not (impossible now, as non-EMV terminals were decertified by Paymark and disconnected from the network about a decade ago).


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  # 2207102 29-Mar-2019 14:31
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I just can't believe the amount of misinformation and anti-bank bias in this thread. 

 

 

 

There's been two and a half people so far that have provided the absolute truth on this and to be honest, its frustrating to see so many just willing to have a go at the banks with no basis for their argument other than "Banks are Bad". 

 

 

 

Please read up on these things and make an informed comment or don't bother at all. 

 

 

 

For full disclosure - I am a banker and have been involved in the payments industry for over 20 years. 





Handsome Dan Has Spoken.

 
 
 
 


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  # 2207186 29-Mar-2019 17:23
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Handsomedan:

 

I just can't believe the amount of misinformation and anti-bank bias in this thread. 

 

 

I'm not anti bank as such, I just think that it's wrong that foreign banks dominate the banking sector in NZ, and the amount of money they make is kind of obscene. I have nothing but love for the The Cooperative Bank for instance, but I'd be happy to see the government reform the sector and either force the Aussie big 4 out of the market or at least cripple their ability to dominate it.





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  # 2207221 29-Mar-2019 18:19
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Lias:

Handsomedan:


I just can't believe the amount of misinformation and anti-bank bias in this thread. 



I'm not anti bank as such, I just think that it's wrong that foreign banks dominate the banking sector in NZ, and the amount of money they make is kind of obscene. I have nothing but love for the The Cooperative Bank for instance, but I'd be happy to see the government reform the sector and either force the Aussie big 4 out of the market or at least cripple their ability to dominate it.



Why do you think the ROI for the big 4 banks is too high? Or do you think the amount of profit they make is too high, regardless of the size of their businesses?

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  # 2207249 29-Mar-2019 18:38
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3% cc fee seems a lot for changing a number in my account and in a corresponding retailers account.

The EU is trying to avoid the parasitic drain on their economy of having Visa and master card behind the payment network that glues everything together. Their master plan is to have direct bank to bank connectivity (via APIs) to cut out the middle man. This is basically eftpos.

I work for the worlds largest fintech company for the record. Currently doing a payments project.

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  # 2207288 29-Mar-2019 19:55
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SheriffNZ:

 

Why do you think the ROI for the big 4 banks is too high? Or do you think the amount of profit they make is too high, regardless of the size of their businesses?

 

In general, I don't think foreign multinationals, particularly in essential services or monopolies (banking is kind of essential, and at 90% of the market between them damn near a monopoly), should be allowed to make more than a very modest ROI.  The royal commission hasn't exactly filled me with confidence in the big 4 either, in fact I'd go so far as to say I'm a bit miffed the Aussie government hasn't arrested most of their senior management, thrown them in jail to never see the light of day, and fined all 4 banks a few decades of profit.

 

 





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  # 2207357 29-Mar-2019 20:30
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Lias:

 

Handsomedan:

 

I just can't believe the amount of misinformation and anti-bank bias in this thread. 

 

 

I'm not anti bank as such, I just think that it's wrong that foreign banks dominate the banking sector in NZ, and the amount of money they make is kind of obscene. I have nothing but love for the The Cooperative Bank for instance, but I'd be happy to see the government reform the sector and either force the Aussie big 4 out of the market or at least cripple their ability to dominate it.

 

 

Well there are locally owned banks, but they are amateur hour comedy shows lacking things that people actually want. Sure you may be able to do some banking with TSB or kiwibank but be ready for them to drop the ball and not know what the hell they are doing. That's if they even offer the products you want. Hint, try opening a foreign currency account at either of them and see if they even understand what you want.





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  # 2207390 29-Mar-2019 22:29
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Lias:

 

Handsomedan:

 

I just can't believe the amount of misinformation and anti-bank bias in this thread. 

 

 

I'm not anti bank as such, I just think that it's wrong that foreign banks dominate the banking sector in NZ, and the amount of money they make is kind of obscene. I have nothing but love for the The Cooperative Bank for instance, but I'd be happy to see the government reform the sector and either force the Aussie big 4 out of the market or at least cripple their ability to dominate it.

 

 

 

 

Foreign banks pretty much dominate the market regardless of where you live. Finance is an international business and retail banking is just a pimple on its butt.






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  # 2207411 30-Mar-2019 05:41
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I guess with the proliferation of Visa/Mastercard debit cards, it's not such an issue.  But still, I wonder why EFTPOS have never bothered to go contactless.  Here in Canada, INTERAC (bascially EFTPOS) cards from your bank have a chip and contactless built in them and they don't have any connection to Visa/Mastercard.  The only downside to that is you need a credit card or (sometimes) Paypal to buy stuff online.  Of the many backwards things about Canadian banking, that isn't one of them.  In saying that, a number of payment terminals in shops etc will have 'no tap' on them. 

 

For reference, the interchange fee for Paywave/Flash is around 2-3c per transaction, depending on whether you're a high/low volume merchant.  This has also led to a proliferation of things like Square (a little thing that attaches to your tablet/phone and allows card payment).  Now if you go to a craft market or something, smalltime businesses often let you pay by card.  It's great.

 

I really like the convenience of tap, when you just want to walk in, get something and walk out, it's great. Here the limit per transaction is really high too.  ($100).  This can be a little disconcerting. It seems silly slowing down progress all because of ideals and fees, the technology is there, and it works right?


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