PaymentsJournal
SUBSCRIBE
  • Analysts Coverage
  • Truth In Data
  • Podcasts
  • Videos
  • Industry Opinions
  • News
  • Resources
No Result
View All Result
PaymentsJournal
  • Analysts Coverage
  • Truth In Data
  • Podcasts
  • Videos
  • Industry Opinions
  • News
  • Resources
No Result
View All Result
PaymentsJournal
No Result
View All Result

Leading Indicators: Consumer Fee Watch

Patricia Hewitt by Patricia Hewitt
September 14, 2011
in Uncategorized
0

Bitcoin icon. Internet button on white background.

0
SHARES
0
VIEWS
Share on FacebookShare on TwitterShare on LinkedIn

The recent spate of legislation aimed atgiving merchants more control over their cost of payment acceptancehas resulted in consumers being asked to pay more explicit fees forusing their electronic payment cards. Whether it’s being surchargedfor credit card transactions in Australia, paying fees for onlinedebit card travel payments in the UK, or spending extra to usetheir debit card in the U.S., it’s no surprise that lost revenuefrom one source has to be made up by another. In the United States,this transition is taking place right now. But, it’s going to be awhile before consumers begin to aggressively push back on new feestructures; unless they take a cue from their overseas neighbors.In this case, we examine the use of merchant surcharges for cardpayments in countries other than the U.S. (where this practice isnot allowed).

For example, in Australia, the Reserve Bank of Australia (RBA) has been soliciting comments fromthe public regarding the use of credit card surcharges. Theidea behind allowing these fees was to give merchants theopportunity to recoup their cost of payment acceptance. However,with no other control in place, these fees soon began to rise andas a result, credit card use began to decline. Now, the RBA isconsidering a cap on these fees in order to help merchantsdiscipline their surcharge practices.

In the UK, regulators estimate that consumers have paid ~300M pounds in debitcard surcharges to the airlines since 2010. Not surprisingly,consumer groups are beginning to put pressure on UK regulators tobetter control these practices. These situations are an example ofhow a free market generally works which is something like this: Thepractice of making money will not be interrupted until appropriatebarriers are put into place.

Therefore, merchants who are able to charge extra fees for using aspecific form of payment will do so. Further, they will charge afee amount that may not have a direct value relationship to theconsumer (i.e., extra security, convenience, enhanced services),since profit-making companies are most interested in increasingtheir profits. We’re not economists, but these dynamics seem nottoo difficult to figure out.

Protecting and growing the electronic payments industry shouldn’tbe an us against them debate. It is the consumer who stands at theheart of every transaction, but today is also in the cross-hairs ofthe battle for control. Let’s not kill the chicken to get someeggs.

Tags: DebitMercator InsightsMerchant AcquiringMobile PaymentsPrepaidSelf Service and ConvenienceSocial Media
0
SHARES
0
VIEWS
Share on FacebookShare on TwitterShare on LinkedIn

    Analyst Coverage, Payments Data, and News Delivered Daily

    Sign up for the PaymentsJournal Newsletter to get exclusive insight and data from Mercator Advisory Group analysts and industry professionals.

    Must Reads

    On-Demand Webinar: Solving the Digital Onboarding Challenge​ – Increasing Conversions without Increasing Risk

    On-Demand Webinar: Solving the Digital Onboarding Challenge​ – Increasing Conversions without Increasing Risk

    February 8, 2023
    legacy infrastructure

    How Modernizing IT Can Help Banks Compete With Fintechs

    February 7, 2023
    Buy Now Pay Later BNPL, B2B BNPL

    B2B BNPL Offers a High-Potential New Chapter in Payments

    February 6, 2023
    eCommerce On Social Media, social commerce

    The Rise of Social Commerce and Social Payments

    February 3, 2023
    Electroneum AnyTask; ETN Crypto, sales enablement

    Ethical Financial Selling: The Role of Compliance Technology and Sales Enablement

    February 2, 2023
    direct deposit

    Nacha Launches Campaign to Reach Millennials on the Benefits of Direct Deposit

    February 1, 2023
    Equinix Helps UK-Based Payments Provider Enable Faster, More Reliable Payments Processing

    Equinix Helps UK-Based Payments Provider Enable Faster, More Reliable Payments Processing

    January 31, 2023
    credit card tumbling

    How to Detect, and Prevent, Credit Card Tumbling

    January 30, 2023

    • Advertise With Us
    • About Us
    • Terms of Use
    • Privacy Policy
    • Subscribe
    ADVERTISEMENT
    • Analysts Coverage
    • Truth In Data
    • Podcasts
    • Videos
    • Industry Opinions
    • News
    • Resources

    © 2022 PaymentsJournal.com

    • Analysts Coverage
    • Truth In Data
    • Podcasts
    • Industry Opinions
    • Faster Payments
    • News
    • Jobs
    • Events
    No Result
    View All Result

      Register to download the Equinix report - Dojo Delivers Fast, Reliable and Secure Card Payments to Businesses on Platform Equinix