Newsagents circling Bill Express
Not much good news for Bill Express today. Their share price has fallen to 10.5 cents, from 12.5 cents yesterday. There is a growing volume of dissent among newsagents about the unilateral removal by a $250 per store per month marketing subsidy by Bill Express last month.
While I am no lawyer, the documents I have seen now from several newsagents suggest that Bill Express has breached the agreement it had with these newsagent. In one case, Bill Express wrote:
In a nutshell, this guarantees that, combined with the other rebates we pay now, you won;t be out of pocket.
Thanks to the Bill Express action last month, this newsagent is out of pocket.
In another Bill Express document provided to a newsagent as part of their representations, Bill Express said:
Express Shop has formed a Marketing Support/Incentive program to offset costs to your business. This incentive is equivalent to making up the shortfall of up to 200 bill payment transactions and in recognition of your efforts in meeting the criteria outlined below and will effectively ensure that you are at a break even or better position.
Thanks to the Bill Express action last month, this newsagent is no longer at a break even or better position – even though they have done everything required of them by Bill Express.
It appears that Bill Express is prepared to breach its agreements and commitments with newsagents, both written and oral, in order to preserve cash. given the action individual newsagents are talking of, this may well prove to be false economy by the company.
Bill Express spin and the ASX
Bill Express took its dispute with newsagents and their representative body, the Australian Newsagents’ Federation, public yesterday in a communication designed to paint the ANF as the bad guy. This comes on the back of the removal of a marketing subsidy of $250.00 a month from each of its 3,500 newsagents – an action which has incensed newsagents.
Yesterday’s communication takes the Bill Express / newsagent relationship to its lowest point ever. While in the past the ANF has run defence for Bill Express, that appears unlikely now. This is what, in my view, has caused Bill Express to come out fighting against the ANF and to engage in what reads like breathtaking spin.
Bill Express says it has paid the ANF $600,000 over five years. So what? The ANF endorsed Bill Express in 2003 and over the next two years, through this endorsement, facilitated Bill Express bringing on 3,500 locations. That’s $171 a location over five years. Not much.
The 3,500 newsagents took on lease liabilities to the tune of $87 million – money which flowed to Bill Express. Nice work if you can get it.
Each year, I’d estimate that newsagents process, on average, $40,000 a year through their Bill Express provided eftpos machines. Even though the merchant fees for newsagents are low, I’m confident that Bill Express makes a clip of around .3 of a cent per transaction. If I am right (and I think the .3 of a cent estimate is low), this has been worth in excess of $2.1 million over five years.
Newsagents sell massive amounts of phone recharge a year through the Bill Express / Dialtime equipment. For many products, newsagents commissions are lower than through other platforms. This suggests to me that Bill Express is making an above average clip from recharge – maybe tens of millions. What a great tollway newsagents have provided.
So, is the $600,000 demonstrative of respect for the efforts of the ANF and suypport for newsagents? No! It’s crumbs, far less than the effort and access deserved.
At some point soon, Bill Express is going to need to disclose to the ASX that it has upset its network of newsagents to the point where the network will shrink and revenues will be impacted. It is only convoluted multiple contracts which stop this happening more rapidly. Thankfully, the contracts cannot force newsagents to process bill payment or sell phone recharge through the Bill Express terminals.
Is the sharemarket informed? I’d say not. You can’t have what you claim to be your most important retail network offside and seeking legal advice on how to terminate contracts and not let the market know.
Bad move ANZ
I was disappointed to receive advice from the ANZ, a bank which has done well out of its relationship with Bill Express in newsagencies, announcing a change in merchant terms and conditions. They have removed the $500 break fee if the merchant agreement is broken within two years and replaced with a break fee of $250 regardless of when you break. Given that many agreements entered into when Bill Express guided people to an ANZ merchant relationship would be more than two years, it’s another fee newsagents need to navigate.
I am curious that the ANZ would send out this announcement following the announcement a couple of weeks ago to Bill Express newsagents taking away the marketing subsidy which, for many, was the difference between losing money or breaking even on the service.
It’s as if the ANZ has heard opf the newsagent anger, anticipated a mass exodus and sought to place a barrier in front of newsagents considering quitting Bill Express and the ANZ merchant arrangements. Why else announce what is effectively a new break fee right now?
Bill Express answers ASX query
Newsagents are wondering what to make of the response from Bill Express yesterday to queries from the ASX in the light of the decision by them to reduce their financial commitment to and support of newsagents. On a related matter, some I have spoken with who have advised Bill Express of their decision to exit the relationship say they are having difficulty actually moving this forward. The extraction process seems broken at the Bill Express end.
Bill Express and ANZ merchant fees
We received a letter from ANZ today telling us that to break the current ANZ merchant arrangement which was put in place with the Bill Express relationship some years ago will cost us a $250 break fee. Up until this advice, a break fee only applied if the agreement was broken in the first two years. To have this fee imposed retrospectively is disappointing. that it’s times immediately after bad news from Bill Express is even more disappointing.
Bill Express – small fry?
An interesting story about Bill Express was on page 61 of yesterday’s Australian Financial Review:
Small fry that nearly got away
The earnings announcements of many small financial services names may appear to have slipped by unnoticed in the February reporting season. But they yielded noteworthy results – some good, some ugly.
Bill-payment network Bill Express released its results on friday after the market closed. It revealed a net loss of $2.05 million for the six months to December 31, against a net profit of $3.9 million last time.
The company had a $1.8 million accounting loss on its investment in prepaid technology providor ETT, as well as $3.4 million in marketing costs for its bopo prepaid Visa card business.
Bill Express said, however, that the loss on ETT would be offset in the second half, when it sold the investment at an expected profit of more than $2.5 million.
Bill Express is using newsagents, its key retail network with 3,500 outlets, to help turn the financial situation around. Two weeks ago they announced the removal of a marketing subsidy of $250 a month paid to newsagents. This subsidy was like an income guarantee. Many newsagents only took on Bill Express because of the minimum income guarantee. The guarantee was not part of any agreement between Bill Express and the newsagents.
In response to the removal of the marketing subsidy, many newsagents are looking at how they can quit the Bill Express network. If this happens in any numbers, the pressure Bill Express is under in terms of share price will escalate. With its shares down 46.9% over the last year and 30% in the last six weeks, the last thing Bill Express would want is further share price pressure.
Bill Express alternative for newsagents
In response to the many calls from newsagents venting anger over their treatment by Bill Express this week, Tower Systems put an offer into the market yesterday to facilitate access to the eziPass alternative:
Newsagents angry at the removal of the $250 per month marketing subsidy by Bill Express are switching to eziPass from Tower Systems.
eziPass offers 300 electronic products including phone recharge, tourist attractions, tollway payments, movie downloads and other products. Details can be found at www.ezipass.com.au.
Access to eziPass does not require newsagents to sign a long contract. Payment for stock is made weekly and margins on some items are considerably better.
eziPass is available immediately from within the Tower Systems software, providing newsagents with a good alternative to Bill Express.
In response to overwhelming demand, Tower Systems has created a special offer, bundling Point of Sale and eziPass for newsagents not using Tower today. This special offer is available for a very limited time.
While Tower Systems is making a standalone version of eziPass available to all newsagents in mid April, many are making a move today, preferring an integrated solution.
An announcement is expected next week on a preferential banking relationship with competitive rates. Tower Systems also anticipates an announcement regarding Optus and Vodafone for its eziPass platform.
Tower Systems already serves over 1,450 newsagents nationally.
Bill Express has misread the market and, I suspect, now regrets their treatment of newsagents. They will need to act quickly to stop their retail network shrinking. In their letter to shareholders yesterday they talk about restructure. They don’t say that they expect newsagents to carry $875,000 a month of the cost of this.
Bill Express stares down newsagents
JULY 2008 UPDATE => for my latest posts on Bill Express, click here.
Bill Express (ASX code – BXP) has unleashed a firestorm of anger among newsagents, its retail network, by removing a long standing marketing subsidy making the relationship loss making for many. The subsidy was removed prior to Bill Express advising newsagents.
The Bill Express action risks newsagents turning off the service and the company being without its retail network. This would upset biller partners as well as telcos such as Telstra, Optus and Vodafone who rely on newsagents to sell recharge through the Bill Express / newsagent relationship.
Some newsagents are calling for a national boycott of Bill Express, some have already stopped accepting bill payment through Bill Express and some are researching possible legal avenues – several having met with lawyers already.
Removal of the marketing subsidy is a high risk strategy by Bill Express. They knew it yet they proceeded. They were told prior to the announcement how newsagents would react yet the proceeded. My assessment is that they chose the lesser of two evils, they chose to save their cash.
In 2003, Bill Express was a small start up in need of capital and a retail network. Newsagents provided both on the promise of shared profit. 3,500 signed up – committing to leases valued at $25,000 each, taking the financial risk and unlocking around $87.5 million in free capital for Bill Express. I was skeptical and arrived late at the Bill Express table. In hindsight, my skepticism was well placed as were the tough questions put by some in the industry.
But that’s history now, newsagents signed up, we delivered the retail network and capital to Bill Express. We signed contracts which are difficult to terminate. Thanks to the withdrawal of the marketing subsidy, we are burdened with around $3,000 a year more in bottom line costs. This is our reward for our extraordinary support. Bill Express, in the meantime, has added $875,000 a month to their bottom line by removing the marketing subsidy.
It is easy to see the winner in this. But it was always going to be so. Bill Express was clever to spin the impression that the subsidy would remain while always knowing that it would end.
It is instructive to break down the four-part Bill Express offer: The bill payment side is loss making; the in store advertising screen system XIP media is a failure; the BOPO debit card is, well, very slow at getting off the ground. Bill Express, as part of their spin to newsagents this week, uses an example showing I can make money if I sign up one new BOPO customer every day. I currently sign up, on average 1.5 a month. One a day is a huge stretch for something with slim margins and a high labour cost; the Dialtime phone recharge component is the only money making aspect for newsagents. However, what we make from this is diluted by the now chunky Bill Express fees.
The numbers put to newsagents by Bill Express this week to show how they can make money are not being believed. Indeed, they make matters worse for Bill Express as they show an organisation out of touch with its retail network.
Recovery from the loss of faith among newsagents looks insurmountable. I wonder at what point Bill Express will have to make an announcement to the ASX about this.
I am conflicted in the Bill Express matter. Seven months ago, I and my team at Tower Systems started work on eziPass, a software product which competes with Bill Express. We developed this product and exclusively integrated it with our newsagency point of sale software. We have also developed a stand alone version which will be available in a matter of weeks free to all newsagents. Up to a week ago, 220 newsagents had signed up with eziPass. Sign ups have increased considerably since the Bill Express announcement this week.
While eziPass competes with Bill Express, my work and that of Tower Systems is pro-bono for newsagents. Neither I nor Tower Systems nor any business assocoiated with me makes money from eziPass. I know that by not taking a cut I was able to maximise the return newsagents achieved from selling phone recharge, attraction tickets, tollway passes and the 300 products through eziPass. This is why many eziPass assessible products have a better margin for newsagents.
While eziPass benefits from the difficulties in which Bill Express finds itself, Bill Express alone is responsible for its problems. It is responsible for promises made on its behalf to newsagents, the failure of the in store advertising screens, the slow uptake of BOPO and the now high cost of its old bill payment technology. eziPass is the smarter alternative. No expensive baggage. No capital outlay. No monthly fee. No onerous contract. No special computer hardware. There are fewer middlemen sharing the pie. It is integrated with point of sale for all 1,450 Tower newsagents and available from April for non Tower newsagents. Free.
I am pleased to be able to offer newsagents an alternative to Bill Express – for many it offers an attractive parachute.
The wrath expressed by newsagents over the last 48 hours is unlike anything I have seen before. They are angry and upset – with justification I would note. I am surprised that Bill Express has remained silent. It’s as if they are resigned to taking a hit because of their decision and that they’d prefer to weather this than reinstate the subsidy. Cash is king I guess.
Beyond the public anger being vented, some newsagents have sought legal advice on action against Bill Express over the removal of the subsidy and misrepresentations surrounding the benefits claimed prior to them signing up for the service. The problem for newsagents is the Bill Express contract many signed. It requires notice six months prior to the end of the agreement that a newsagent does not wish to roll over otherwise it is automatically renewed. Of course, most newsagents have not given such notice and have automatically renewed contracts.
My view is that the Bill Express contract will need to be tested in an appropriate forum. Whether this is tribunal such as the Consumer, Trader & Tenancy Tribunal in NSW or as high as a Supreme Court or somewhere in between remains to be seen. In the meantime, newsagents can vote through their actions by putting as little business through Bill Express as possible.
Bill Express Tattersalls link slow
The speed, or lack thereof, in the Bill Express technology when selling Tattersalls products is a problem. From when you hit the Tattersalls button on the hardware there is a five second delay before you see the next screen. Thankfully we have Tattersalls terminals for selling Tattersalls product. I’d hate, in a busy newsagency, to be relying on the implementation on this bill payment terminal.
Is Bill Express too expensive?
A potential supplier to newsagents approached me earlier this week seeking access to the newsagency channel for their voucher based product. They claim to have approached Bill Express but were turned off by what they say is a high access cost.
Newsagents place enormous faith in Bill Express as a gatekeeper for our channel. I’d like to think that there is an audit of all proposals put to them by suppliers wanting access to newsagents – to ensure that newsagent interests are being fairly represented.
I am in a similar position at Tower Systems and resolve this by providing free access through our point of sale software. We take no commission on sales and implement links (such as eziPass) for new products without charge. We are as transparent as newsagents should expect.
Tattersalls / Bill Express trial imminent
The trial of selling Tattersalls lottery tickets through the Bill Express bill payment terminals is set to start in in Victoria in less than a week. Many will have forgotten about this trial which was announced by Bill Express and Tattersalls two years ago. Why we need to sell lottery tickets from an already busy and very slow Bill Express terminal is beyond me. Questions about commissions, who else will sell these tickets and the impact on overnight settlement are yet to be answered. Newsagents ought to be wary of this trial
Australia Post retreats from online bill payment
The Australian Financial Review today reports that Australia Post is scaling back its online bill payment service. While it is not good karma to rejoice at the hardship of another, I say good on Bpay for beating Australia Post in the online bill payment game.
Newsagents entered the over the counter bill payment space in 2003 in partnership with Bill Express. The Government owned Australia Post engaged in all manner of blocking tactics to stop the small business network from competing. One tactic involved a claim of intellectual property over the barcode billers printed on their bills.
Today, more than three years on, newsagent over the counter bill payment transaction volumes remain small compared to Australia Post. I would say that this is, in part, due to the aggressive stance taken by the Government business.
Australia Post threatening LPO newsagents?
Several newsagents with Licenced Post Offices have told me that Australia Post has recently advised them that if they do not remove the Bill Express equipment from their counter immediately they face a dramatic increase fees association with Australia Post terminals.
Fran Bailey, the Federal Minister for Small Business, was on ABC Radio touting her government’s small business credentials. The Minister ought to acquaint herself with for Australia Post operates. They are competing with newsagents for customers through Government owned stores and now, if what I have heard is correct, they are pursuing newsagent LPOs over services they can provide.
Bill payment sales game for newsagents
At my software company we use sales games every year or two to reinvigorate sales and those who manage the sales process. Conducted right, sales games are a win for all concerned. I’m pleased therefore to see that Bill Express is using a sales game to enable newsagents to win back the cost of the recent BOPO debit card in store training. I like the idea because it reminds newsagents about the importance of bill payment and gets them thinking about this and BOPO in entrepreneurial terms.
In the Bill Express bill payment sales game, the bar is not too high. It’s built around newsagents engaging with their customers a little more to increase bill payment transactions. In return, newsagents win a rebate of the cost of BOPO training – a good commercial solution to an issue newsagents would have thought was lost.
I need to declare that I was one of the people Bill Express consulted in navigating this issue as a result of comments here.
Bill Express and bopo executives work with newsagents to mend bridges
I met with senior representatives of Bill Express and bopo (the Australian pre paid Visa card) for two hours on Thursday to discuss the charging of newsagents for training in selling bopo account top up. The meeting came about in part due to blogging here. It was a frank and fruitful discussion and, I’m pleased to report, not the only such consultation with newsagents on this matter. I am confident they will respond to newsagent concerns about the training and, at the same time, further guide newsagents as to the business opportunities of bopo.
Another BOPO complaint and then kudos
Newsagents are not alone in their frustration with the BOPO card launched a couple of months ago by Bill Express. David Vennik blogs (loudly) about his experience. While David’s post, in my view, is over the top and unnecessarily obscene, it demonstrates the risk of blogging to companies and, at the same time, the value of the medium for lovers of democracy.
Newsagents are less colourful in their complaints about BOPO but just as angry over being charged up to $200 for training which lasts no more than a few minutes.
When I did the Google search which brought up David’s blog post, I also found this post at the Multiple Sclerosis Peer Support Community. That link pointed me to this discussion about BOPO at the Whirlpool forums. Fascinating.
Back to the newsagent issue with Bill Express and BOPO. Bill Express needs to listen to newsagent complaints and reconsider their decision to charge for the training. As their partners, newsagents deserve better treatment.
Newsagent anger grows over Bill Express BOPO card training
20/01/07 UPDATE. The concern expressed below has been well addressed by Bill Express announcing a sales game for newsagents. More here
Things have deteriorated in the two weeks since my Dec. 16 post about newsagents being ‘charged’ for training by Bill Express (ASX code: BXP) in the sale of its new BOPO debit card.
Newsagents are reporting being charged even where no training has been provided. Others have refused the training and still been charged. Many who have received training are reporting that it took a few minutes and they were still charged upwards of $200.00 including GST.
It is rare that a supplier keen to win new business would force training on their retail network. However, the arrangements between Bill Express and newsagents are such that this can happen. Bill Express is reducing a subsidy for one month to ‘charge’ for the training. The subsidy was put in place in 2003/04 to financially support newsagents while Bill Express brought billers on board. As the biller traffic has not been as great as expected, the subsidy has been maintained. Without it newsagents, would be losing money and this would create further problems for Bill Express.
Newsagent anger at having to pay for training is at a serious stage. Some are openly calling for class action to be taken against Bill Express.
From what I can see there is no correlation between the actual ‘charge’ and the cost of the training. This makes me doubt the justification for the charge. I am suspicious that this is more about Bill Express’ cashflow than training. Why else would they charge a business $200 for something which is easily handled over the phone in a few minutes?
Unless the situation is resolved in the next few days, Bill Express will have done irreparable damage to its relationship with many newsagents. The only reasonable solution now is the immediate reversal of the training ‘charge’. This will demonstrate good faith to newsagents and stop them from quitting their Bill Express contracts.
The $25 a minute charge which disrespects newsagents
20/01/07 UPDATE. The concern expressed below has been well addressed by Bill Express announcing a sales game for newsagents. More here
This blog posts starts with three questions:
Should a supplier wanting retailers to sell their new product charge for in store training?
Is $200 for 8 minutes of said training fair?
Can the training be adequate if the trainers have not been trained themselves and are given up to 20 stores to visit in a day?
Bill Express (ASX code: BXP) is charging newsagents up to $200 to train them in the sale of the new BOPO rechargeable credit card. Well, actually, they are not charging newsagents. Rather, they are cutting this month’s marketing rebate – a credit newsagents have received to their Bill Express equipment lease costs since the installation of the Bill express network in newsagencies three years ago – by up to $200 depending on the rebate a store earns. We’re told it is a cut to the rebate for this month only.
By cutting the rebate Bill Express saves up to $600,000 this month – to fund the training. In my newsagency the training visit lasted eight minutes and consisted of dropping material off and chatting briefly – there was no training – certainly nothing of value was shared, yet I’d been told by a Director of Bill Express that this training would be important for compliance. There was no aspect of compliance in the training in my newsagency.
In some newsagencies the ‘training’ has been over the phone while in most it seems to be in person and completed in 10 to 15 minutes. One newsagent said their trainer was covering 20 newsagencies that day. Another said their trainer was trained over the phone. Another said the trainer said she was getting $30.00 a site to do the training.
There have been more than 100 public complaints by newsagents about this in the last five days. It’s a problem for Bill Express and for the industry associations which have endorsed the one off reduction in newsagent marketing rebate of up to $200 to fund the training. If the $30 payment to the trainer is accurate and allowing for a 25% agency premium plus some setup costs, it is fair to claim that this national ‘training’ has cost Bill Express under $150,000, leaving a windfall profit of up to $450,000, courtesy of newsagents, to book this month. If accurate, it’s a nice bottom line bonus.
The average time being spent per store supports the $30 per outlet theory, it’s why the training is rushed. While I am hot happy with a supplier asking me to pay to be trained to sell their product, what Bill Express has delivered is disrespectful and it harms their reputation among newsagents. The training will not improve compliance or the ability of newsagents to sell the BOPO product. Newsagents have effectively been forced, without proper consultation, to fund the delivery of in store marketing materials and not much more.
Would Coles or Woolworths accept this? I suspect not.
Bill Express would be well advised to reconsider its position on not paying newsagents the marketing rebate this month. In the light of the actual costs revealed and the evidence that no real training is being delivered it is inappropriate that newsagents be charged as originally planned.
If Bill Express does not reconsider and accept that it has made a mistake in its relationship with newsagents in how it has handled the BOPO matter, it will experience mass cancellation contracts as they fall due.
Newsagents have, in their national retail network, an asset of extraordinary value. The day newsagents price access to that asset commercially is the day newsagents will demonstrate that they understand the nature of competition.
Newsagents had hoped that Bill Express would draw bill payment traffic from Post Offices. This training mess puts the competitive offering at risk as billers will not be comfortable supporting a disgruntled network or a supplier which does not respect its retail network.
Newsagent anger at Bill Express
20/01/07 UPDATE. The concern expressed below has been well addressed by Bill Express announcing a sales game for newsagents. More here
Bill Express is launching its new BOPO card through newsagents and is them for in store training. Newsagents are required to take the training. We said no in my shop and were told we have to be trained – even though we have already done BOPO card transactions and have mastered more complex processes. Would Bill Express charge each Coles outlet for similar training? I suspect not. Newsagents are angry at what some say will be a $200 hit on their business for training which is not needed. Given the volume of discontent, I would not be surprised if Bill Express backs down and delivers the training free of charge.
Is this how Australia Post squashes the competition?
I’m reliably informed that Australia Post has told at least one Licenced Post Office operator that their $60.00 a month Australia Post terminal fee will jump to $1060.00 a month if the LPO operator continues to offer the services of Post BillPay competitor Bill Express from the same business.
If the small business owner gives into the Australia Post threat they will lose access to better eftpos and other rates they gain through the Bill Express relationship.
If the story put to me is true, it is another example of conflict for the Federal Government and its ownership of Australia Post. Australia Post, through its 865 corporate stores, is hurting independent small businesses Through it’s LPO network is pressures other small businesses on fees and on taking cheap stationery product imported from China.
The fight for in store adveretising real-estate
In January we installed this LCD screen in store to promote products we sell. We did this out of frustration with the Bill Express screen which was advertising businesses and products outside our shop. Since then, Moving tactics have been promoting their advertising screen to newsagents. My understanding is that I could make between $1,000 and $4,000 a year from the Moving Tactics unit. The numbers are similar for local ads on the Bill Express unit – but these advertise businesses outside my shop and I cannot veto an advertiser. While these screens controlled by others carry professionally produced national campaigns, I’d rather have full content control and focus on products which suite my business that day. I reckon I’ll make more from that.
How newsagents can lose a sale thanks to ‘smart’ technology
Over 3,000 newsagents use equipment from Bill Express to process credit card payments, telco recharge business and bill payment.
Up until about 2 months ago if you processed a Credit Card transaction on the Bill Express EFT Terminal and failed to press yes or no to verify the signature, the transaction would process through as an approved transaction. If you were tied up with that or another customer and didn’t answer yes or no then your transaction would still go through and the funds would hit your account.
Somebody in their wisdom decided it be best that if yes or no was not pressed in time the transaction should decline regardless of the document signed by the customer showing ACCEPTED.
We experienced this first hand several times in my shop. We approached Bill Express and they advised that the change was an ANZ policy. We approached the ANZ and they denied this. They went on to advise that it used to be the case years ago on old MultiPOS terminals.
ANZ Merchant Services advised us ten days ago that this was one of the most common reasons people (especially newsagents) called their support centre. ANZ changed their software on the new stand alone MultiPOS unit so that the transaction would go through. Given the conflicting information put to us by Bill Express and the ANZ we cannot be sure as who needs to do what, one or the other needs to change their software for processing on Bill Express terminals.
The idiot who made this decision has cost newsagents (including us) money. That there is spin from Bill Express and (possibly) the ANZ is disappointing.
To Bill Express we ask: Why make a fundamental change such as this and not clearly inform your customers? Bill Express should have advised clearly what steps we need to take to recover the funds in an approved transaction being converted to a declined transaction.
ANZ Merchant Services, to their credit, have provided us with a process for recovering money from transactions cancelled. This at least helps us claw back funds Bill Express told us were lost.
My frustration is that either Bill Express or ANZ or both have let newsagents down. That no one has owned up to this is most frustrating and demonstrates a lack of regard for the newsagent channel. Had I not alerted newsagents to this problem ten days ago they would not have known nor would they have had knowledge as to how to recover the money lost.
Bill Express moving into McDonalds
After gaining an excellent footprint in newsagencies, Bill Express has announced the signing of a heads of agreement with ETT which will see kiosks offering Bill Express products and services in McDonalds stores. (The ETT announcement has more detail.)
While Bill Express needs to do what is right for its shareholders, they went into newsagencies making certain promises on driving traffic to newsagencies and newsagents being their preferred retail network. The work with newsagents in nowhere near done yet they are developing the retail brand elsewhere. The announcement yesterday risks diluting the newsagent/Bill Express connection.
Newsagents have committed significant leases to fund the Bill Express equipment in their stores and many will be wondering about that investment in the context of the McDonalds move.
Bill Express will pitch that their move is about serving the consumer. I could be persuaded to agree with that. However, there is plenty of consumer satisfaction which could be achieved in the 3,500 or so newsagents offering Bill Express today and this should be the focus ahead of the McDonalds project. The easier it is to sell Bill Express products and services in newsagencies the greater the sales and the more suppliers who will be attracted to the network.
If the announcement is more about kiosk type operation then locating the kiosks in newsagencies might have been a better first step.
I hope this is not a case of independent small business retailers being beaten by a giant US corporation like McDonalds. Only time will tell.
Footnote to those precious souls who read my opinion here and mistake criticism here as an indication that I am against them and or their position on the topic under discussion. To make such an assumption would be wrong. I mention this because of recent comments from people representing businesses I have commented on. There is nothing to lose and plenty to gain from robust debate.
Bill Express focus in AFR
Today’s Pierpont column in the Australian Financial Review takes the blowtorch to Bill Express, a key trading partner of 3,000 newsagents. The Pierpont coverage is interesting in the context of electronic product supply problems a month or two ago. Newsagents have each given undertakings costed at around $26,000 over four years to be part of the Bill Express network. Bill Express is important to newsagents in facilitating their competition in the bill payment and telco recharge spaces – with one key competitor – Australia Post.