You know what I'm talking about here, right? They're the little extra amount that you get pinged when you turn up at the dairy and you use your credit card, or you use your paywave - it's gone from May next year.
The big sell behind this is basically that it's to help you with the cost of living crisis.
Now, I hate to do this because I know you're thinking, "Oh, yay." And I'm totally gonna rain on that parade for you.
Don't get excited, this is gonna fix nothing. You are still gonna end up paying that cost somehow, probably just through the cost of the bottle of milk that you're buying. Or your haircut, or your sushi or whatever it is - it's gonna be built into the price because the business still has the cost.
Nothing is changing there. They've still got to pay that merchant fee.
Now, a merchant fee is a very complicated set of charges which the business gets lumped with. And most businesses actually have no bloody idea what makes up that merchant fee.
There's a fee from the credit card companies, there's a fee for moving money from the banks, there's the EFTPOS providers - the whole thing gets lumped into the merchant fee and that has not gone away.
What's only gone away is the business's ability to be able to recover the cost of some of that through the surcharge.
And by the way, the cost of that thing is actually quite big. I've read about one business - just one shop - that pays about $14,000 in a year just for that, just for the merchant fee, to be able to do business electronically.
Now, what's going to happen if you go to that shop is, because that guy can't now pass it on to you with a 2 percent, 0.7 percent, 1 percent surcharge or whatever, he's simply going to add it to the cost of his product so that across the year, he makes that $14,000 back.
Also, another reason why you shouldn't get excited about it is that this ban does not include anything that you buy online.
So you're buying your Air New Zealand tickets? You're still gonna be paying that little $6 handling fee.
You're buying some tickets for a concert from Ticketmaster? You're still paying that handling fee.
Maybe you want to head along to Banksy? Yep, you're still gonna be paying yourself a nice little $8 handling fee.
And the problem with that is that these are some of the most egregious examples, I would have thought, of surcharges just bearing no resemblance to reality - but they still slip through this.
So instead of actually sorting out the backroom problems and the real gnarly issues - what has been charged by the banks and the EFTPOS companies and the credit card companies and really excessive surcharges - the Government's just taken the easy option and brought in a ban on the little stuff you buy from the dairy.
Good headline. Unfortunately, though, just a charade.
Heather du Plessis-Allan is a journalist and commentator who hosts Newstalk ZB's Drive show HERE - where this article was sourced.
9 comments:
A small economic sop to make you feel better.
Why not fix the big things which will make citizens feel really much better - e.g. repealing the MACA law, the Waitangi Tribunal mandate, reforming the msm, funding university apartheid policies, Maori seats, status of English as NZ's main language. Are these in the "too hard" basket? National stopped ACT's Treaty Principles Bill and might stop or amend its RS Bill.
National should already be very concerned about voter displeasure in 2026 and Luxon's blatant refusal to hear the clear messages on citizen equality.
Heather I agree the costs associated will flow back via slight rises in current pricing but that is a normal aspect of businesses anyway. This move is about perception and perception is how people form their views. So it may not be a true saving but EVERYONE resents paying addition card fees for using a system we have been pushed to use by the banks and EFTPOS companies.
Banks charge retailers only 0.7% per transaction for paywave, yet retailers often then charge customers 3% for the transaction saying its the fault of greedy banks. Many eftpos machines only work on paywave, so the 3% just turns into an undisclosed price rise for the retailer.
I think the point is that we want to avoid the situation they have in the States where an item might be $5 in the menu or on the shelf but by the time you pay the tip, State sales tax, federal something else etc etc, it turns out to actually cost you $10.
This article demonstrates the problem with people who do not know what they are talking about, writing media articles.
On top of anon 755's pertinant observation, the surcharges reduce bank competition by discouraging credit card use.
There should be a mandatory declaration at the bottom of each article outlining the experience and qualifications of the writer, alongside information on how the reporter secured their job.
Thanks Barry!
Crypto is looking better every day.
Surely we aren’t at a point yet where our society is so stupefied that they can’t immediately see this??
But then again, our disappointing labour lite government has decided to do this ridiculous redundant move… 🤔
Last I looked the Aussie banks were pulling $7 billion per annum from NZ, Or $1,400 per man woman and child. I heard of a relatively small business carrying $110,000 of such charges, at which point they called 'time' and started adding a small surcharge. The vast majority of customers immediately switched to paying by EFTPOS /Debit Card and choosing to type a PIN rather than pay for the 'convenience' of Paywave. In such way the surcharge actually saves many people money (by keeping stores from related price increases, and discouraging customers from racking up the CC). Yet another National exercise in straightening of decks chairs on the proverbial Titanic, no more or less.
Yep, the Aussie banks love us, for we are the most profitable mugs (for them) on this Earth. It's past time some real competition emerged and Kiwibank lost its 'woke' spectacles and was capitalised in a way that made it a real competitor. But it does have to lose those specs first!
Right on the button Anon 7:23! This is not the only inconsequential but appealing announcement of late. So sick of the pollies playing us for fools - and they’re all guilty of having a crack at it, every last one of them.
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