It’s hard to imagine a world without EFTPOS, especially at Christmas. Whether for shoes, holidays or groceries, we’ve all turned to our trusty debit card when we don’t have cash or are resisting the plastic. And we haven’t had to pay a cent to use it…until now.
With a season of heavy spending ahead of us, Your Money Magazine investigates how a small change in banking policy might mean you’ll be paying more at the counter.
It used to be that whenever you made an EFTPOS transaction at any retailer, your bank had to pay a 5 cent “interchange fee” to the retailer’s bank. Now while you may be thinking 5 cents is tiny, when you consider that Australians made over 2 billion transactions last year, that adds up to a sum of money we can only dream about!
So under this old system, EFTPOS was pretty much a free service. But that has all changed since October 2011. The banks have changed their policies, a move that will generate a massive $150 million of additional profit by the end of June 2012.
And how? Well it couldn’t be simpler; they’ve turned the old process on its head – so now the retailer’s bank has to pay yours for any purchases over $15.
Hey that doesn’t sound like it’ll make much of a difference, right? Well, let’s take a closer look. Imagine the situation the retailer’s bank is in.
They now have to pay a fee for every single transaction you make. They’re potentially forking out hundreds of thousands of dollars which they didn’t have to before.
Of course they’re not going to take it sitting down. When it comes to cost-cutting, no one does it better than a bank. And it’ll come as no surprise to you that they do this by passing their costs on to their customers.
How much will it cost you?
Now these customers are the shops we go to everyday – the department stores, the small boutiques and the tired old corner shop. Problem is, they have to get the extra money from somewhere, and so up go the prices!
“It’s the smaller stores and retailers who say they don’t have the same economies of scale who are saying they may have to pass it on,” said Ingrid Just, spokesperson for consumer watchdog Choice.
Surprise surprise, the banks have worked out a way to make us foot a bill we didn’t even know existed. They’ve pulled out their bad boy switcheroo tactics, and it’s seems like another ‘they win, we lose’ story.
By now you’re probably thinking ‘oh no, there goes the family holiday this year’, and fair enough, this all sounds pretty scary. But there is hope.
Just says that the fee does not apply to supermarkets such as Coles and Woolies, and few retailers have passed on the fee to consumers as yet. “To date we have not seen many pass it on, so perhaps the majority will absorb the fee,” she says.
So you’ll be glad to know even if you are charged extra, it’ll probably only add up to an extra 2 or 3 cents at the end of your bill. Sure that’s money we could probably do with keeping in our pocket, but for once it seems the retailers aren’t trying to get as much out of us as possible!
By Tara Waniganayaka
Collections: Mortgage News