Ethics

I was privileged to spend an hour and a half yesterday meeting with representatives of the Victorian Government’s Transport Ticketing Authority along with Peter Cowley, CEO of VANA, Don MacAskill, National Policy Manager of the ANF and Bernard Zimmermann from POS Solutions. The meeting was called to brief the TTA on how newsagents could easily implement support for the new Myki transport ticketing solution when it launches in a year or so.

Given that we already sell phone recharge, gambling account top up and payout, and a raft of other ‘soft’ products direct from the newsagent point of sale, the technical aspect of the discussion was easy. The key is to show the TTA and their prime IT contractors for the project how this has been achieved with many other third parties including some businesses putting more sales through than planned for Myki. Direct from within the Tower software newsagents are selling phone recharge, betting account recharge and other products. Next week we commence a trial which brings significant new product exclusively to the point of sale.

I am confident that software developers talking with software developers will demonstrate how easily the TTA goals can be met and that newsagent can sell Myki recharge – replacing MET tickets – can be time efficient at any register point.

The more significant conversation was around commercial terms – even though this was not the purpose of the meeting. It was not a negotiation session and nothing was agreed. I was glad to be able to switch from my software company hat to my newsagent hat.

I was surprised to discover how far the TTA appears to have gone in their relationship with 7-Eleven on Myki. This is not a good look for a government which talks up its small business credentials. I would have thought a government concerned about small business would have made sure that small business newsagents, the group which sells half tickets sold at retail today, was locked in early. Now we are playing catch up.

I was also surprised to discover that as a newsagent I am, on the current terms, being asked to take a 66% cut in commission. Sure I will not have to carry stock, but a 66% cut when rent increases 5% annually and wages between 5% and 8% annually is, by any measure, uneconomic. This, again, from the Victorian Government which beats its chest about small business.

The final surprise came from the fees which would apply to newsagents if a customer uses a Myki card to pay for other products – this is yet to be approved by the State Government. The planned fee is 2.5%, putting it in the realm of American Express or Diners Club. Given that shopping centre newsagents have occupancy costs of around 11% and labour costs of around 11% and shrinkage of around 3%, there is little room with which to absorb a 2.5% cost on a transaction.

I appreciated the time the folks representing the TTA gave to the robust and somewhat off topic commercial discussion. They were generous with their time and did listen to the points made. I expect that we will demonstrate newsagent software capabilities and that this will get newsagents closer to an even footing with 7-Eleven. This should open the door to a robust discussion around commercial terms for newsagents.

Bernard Zimmermann’s post on the meeting can be found here.

The image used on this post is the trade marked Myki logo. Their website has more details.