I am concerned at the lack of engagement on the issue of soon to increase EFTPOS fees. Newsagents and other retailers, it would seem, just don’t care. When I try and talk with colleagues about the issue too often they switch off. It is as if they do not feel connected to the issue.
Here is what we know … soon, in a matter of months, small businesses like newsagencies will face EFTPOS fees which are less competitive than the fees we have today. We will either have to soak up increased fees or pass them on to our customers. Either way, we lose. Our two big supermarket competitors will not have these fees.
The decision which led to this situation was made by EPAL, a company controlled by the big banks plus Coles and Woolworths – as I blogged a few weeks ago. If you want to see where this EFTPOS fee issue could play out then read Swiped: Banks, Merchants And Why Washington Doesn’t Work For You which appeared at The Huffington Post last month. In this excellent article, Scott Carter and Ryan Grim have outlined where EPAL, the big banks and their big retailer mates could be taking us – consumers and small and independent retailers. Check out this excerpt from page 2 of the article:
Banks began issuing cash cards in the 1970s as a tactic to automate services and cut labor costs — more ATMs meant fewer bank tellers and check processing costs. When swipe machines were first introduced in stores, banks actually paid some merchants to accept debit cards. Later, swipes became free, and once debit cards had become ingrained in consumer culture, banks began charging merchants, and the costs keep going up.
Click on the second link in the excerpt above to read The interchange fee rip off an article by Felix Salmon published by Reuters last year which goes to the heart of what we face.
Despite the spin which EPAL is brilliantly distributing to politicians and others who challenge their decision, we can expect that fees for small and independent retailers and other businesses will increase. And while EPAL will say that is a matter for the banks, the genesis of the rise will be the EPAL decision. It will not end there. We will face more increases.
The deals and offers from banks to get us to put terminals in our businesses and to hook us on plastic are similar to the behaviour off the drug pusher keen to get a customer hooked. The first step is so tempting that one does not think there can be any bad on the other side. Yes, the deals were too good to be true.
We are hooked on plastic and the banks know this. This is why they think they can get away with the rip off which we are about to experience and which will separate our small businesses from the likes of Coles and Woolworths.
So, newsagents and others here, do you feel like engaging now? I hope so.
I am grateful to writer and broadcaster Paul Wallbank from for pointing me to the Huffington Post article.
Mark,
I wrote to both my, Local MP Alby Schultz and Senator Bill Hefferan,
The response was similar and appeared to come from a pre perpared press release. They state banks will decrese bank charges elsewhere as a result. Yea and pigs mights fly.
There was no mention of the fact Coles and Woolies had seat at the table along with the RBA and Banks when it came to deciding these new charges or the fact that Coles and Woolies charges will (including rebates) not change while the rest of us will pay significantly more killing what is at present a level playing field for all.
I will now chase my Local Chamber of Comerce and State MP Katrina Hodgkinson.
Peter
Pity that there has not being an election called as then they would be falling over themselves trying to help. Unfortunatley we have received a similar response when bought up. The only time we generally see our local member is when there is an election and he wants to set up outside our shop and say how great he has been.
Mark, you will find that the only responses we are getting from MP’s is that it is out of their control, so basically bugger off.
Independant businesses have NO pull whatsoever against 2 companies that control over 50% of the market and EPAL ( wouldn’t it be nice to have a monopoly, I remember a time we had one until the supermarkets cried foul and the Govt stepped in to protect them)
Jump up and down as much as you like it will not change what will happen, so get your house in order for when it is applied and make your own arrangements.
my complaint was passed on by my member (bob katter) to wayne swan, not heard back from wayne yet!!!!!
I received the standard response (ie, NO RESPONSE AT ALL) from both my Federal and State MPs.
Hi,
It’s hard to get justice in democracy until you have a numbers so we have to be united and represent our point of view. Most of us believe that we can’t do much therefore just wait. Mark had pointed out before that we should make representation to productivity commission in retail. all of us should jointly make a submission , last day is 20th May. http://www.pc.gov.au/projects/inquiry/retail-industry/make-submission
It’s not too late to have an association which represent true interest of Newsagents.
Just in today, I have copied down what was in the letter addressed to me.
Thankyou for your letter of 24th March 2011 to the Hon Bob Katter MP, Minister for Kennedy, concerning EFTPOS fees. Given my resposibility for Small Business, Mr Katter has asked me to respond on his behalf.
I understand that the recent changes to these fees are intended to appeal, broadly, to merchants, issuers ad cardholders and balance their respective concerns, as well as enhance the sustainability of the EFTPOS system.
While the Payments System Board and the Reserve Bank of Australia are the independent government agencies with primary responsibility for the payments system in Australia, the Government strongly supports the efforts of these agencies in their reforms to promote a competitive payments system.
The Government will monitor the impact of the reforms on the debit system market with interest, particularly for their impact on consumers and small business.
The Hon Bob Katter MP has also refered your concerns to the Deputy Prime Minister and Treasurer, the Hon Wayne Swan MP, as he has policy responsibility in this area. I have also forwarded a copy of this letter to Mr Katter for his information.
Thank you for taking the time to bring these concerns to the attention of the Government. I wish you every success in your future business endeavours.
Yours Sincerely
Nick Sherry
Minister for Small Business
Mark, does this solve all our problems??, no wonder we think it is all just too hard sometimes
I think one reason some people feel the situation is hopeless is because we are unable to actively resist the change. Yes, we may write letters as many have done, but the pathetic response letters don’t inspire confidence.
With the recent Fairfax issue in NSW recently, newsagents could actively protest in a number of ways including not delivering etc, but with this issue, there seems to be a lot of talk, but no action.
I will keep writing to my local member and to various government agencies, but without expecting much.