since Covid 19 the use of tap’n go and cashless payment has been promoted to reduce the risk of contracting the virus. And still Aldi charges for the use.
If there so good maybe they should charge to use bacteria infected cash instead.
5 Likes
Aldi has always promoted the cashless payments, and they have always been up front about the (0.5% or ½%) additional commission for using cashless payment. So to put this into perspective, you are concerned about paying an extra 50c for every $100 you spend.
All the Aldi stores I have visited have abundant hand sanitisers provided to be able to disinfect after touching produce or cash.
Ever since the Second World War, the Aldi business model has been low mark-up and high turnover. If they adopt a different business model, they could put their prices up in order to be able to absorb the commissions, but would that be fair to those who pay by cash?
If you prefer for the commission to be included in the prices you could utilise Woolworths or Coles, or perhaps some independents.
3 Likes
I am empathetic with @meganchild. Many companies are promoting contactless payments because of COVID, and adding their surcharges. Some don’t even reference COVID just push using cards, and add their surcharge. Whose convenience is this for? Might be yours or mine, or even the business’s.
Since it might only be $0.50 per $100 spend, the real estate agents rental collection agents only charge around $3.50 per payment, or only about 1%, so it must be OK, right?
The bottom line in my personal value system is that I should be able to pay for anything fee free in one way or another, and I resent businesses pushing (worse yet, mandating) payments that attract fees for paying.
‘Apparitions of a cashless society’ are nothing but apparitions and represent ever more more ways for more parties to put their hand in the till for their cuts.
‘Selling those payments’ is one thing, but at the end of the day they are similar to a company ‘recommending’ you buy X (at your own cost).
If Aldi (or any business) had signs stating ‘Even though it will cost you 0.5% please consider paying contactless’, I would have less a problem with the concept.
7 Likes
ouch that’s a bite on the bum if ever I had one
Cashless payments advantage businesses in many ways, such as streamlining & speeding up customer payments; reducing cash handling and the need to reconcile cash with till; reduced visits to the bank to deposit & withdraw; etc. Hopefully these reductions in the cost of business are passed on to consumers.
Cashless payments also advantage consumers in not having to carry cash; worry about tendering correct money; checking change; having double receipts (till and card); etc.
The following quotes in italics are from the ACCC on payment surcharges:
“When a business accepts payment for goods or services by a debit or credit card, it usually incurs costs for processing the payment. Some businesses include these costs in the price they charge for their goods or services, and others pass the costs on as a payment surcharge.”
…
“The permitted surcharge is an amount not exceeding your costs of acceptance for each designated payment type.”
What this states is that the surcharge for using credit or debit cards can only be cost recovery.
"“Credit cards usually have a higher cost for businesses, and may cost up to 1-1.5 per cent for Visa and MasterCard, and between 1.5-2 per cent for an American Express card payment.”
Clearly then, Aldi is charging below the usual and acceptable surcharge. When we had a small business many moons ago back in the days of the clunk-click machines, I calculated the cost of providing credit/debit payment facilities was 5% when I included all the relevant costs (fees, interest, device rental, stationery, etc) we had to pay to the bank! Obviously Aldi has the benefit of a much lower charge based on their volume.
I agree, but this should be directed at the banks, not at Aldi who are passing on the costs charged to them.
3 Likes
So those ‘advantages’ that are paid for by those who contribute via surcharges are good, but raising prices overall to have no surcharges is bad?
Why the banks when it is the business that decides at the end of the day?
1 Like
As I said above, if there is a surcharge, people may be able to pay cash to avoid this. If the overhead is included in the increased price of products then there is no avoiding the surcharge even if paying cash.
Because it is the banks who are imposing the extra cost that you oppose. They could absorb that cost from the rather large profits that they make.
1 Like
You seem to be going both ways that cards improve efficiencies and are thus good, but isn’t it the case those who pay for the privilege via surcharges thus subsidise everyone. And that is good. But setting a price to cover everyone is bad, or so I understand that is much of your point?
They could, but what are the odds? Possibly less than them reducing the often 22%-ish interest rates on the cards when savings are as low as 0.1% and these day 0.9% is almost princely, right?
We should agree we have somewhat different views and move on.
3 Likes
my thought is that big businesses take the surcharge hold it till the payment schedule (weekly / monthly) and during that time place the funds in a holding account to accrue interest thus accruing interest on the tap n go debit card (just cause you tap rather than insert) that then accruing profits.
(And from a bankers perspective the cash is filthy and germ ridden you actually need to wash it to deem it clean)
No, the surcharge comes off the monies transferred from the purchaser’s credit card issuing institution. For example and using Aldi 0.5% surcharge (assuming that their merchant fees were also 0.5%), if a purchase was $100, $99.50 would be transferred into the business account. Aldi doesn’t see the surcharge.
This saves considerable cost (and double handling of monies) associated with reconciling accounts, compiling surcharges and invoicing businesses for payment by credit card issuers.
2 Likes
Must be why all the criminals take it to the casinos.
1 Like
First, a bit of history; when Bankcard first became available back in the '70s, it was unlawful to charge a fee for using the card to make a purchase. Eventually, the law changed to what we have today. Banks can easily justify the fee against their costs of providing all sorts of FlyBuys type incentives, so in this sense you’re paying for something you hoped you’d get for nothing. I prefer the loading as long as there is an alternative payment method. Cash is still legal tender whether the vendor likes it or not, Qantas accepts BPay fee free and I have a debit card that doesn’t usually incur a fee or a foreign currency loading.
Finally, a bit of cynicism; is it possible that some merchants do a deal with their bank whereby they pay a higher merchant fee, which they recover from customers, in a deal that provides them with concessional interest on business borrowings?
that’s a good pun, when I worked in the bank the cashiers that did the counting by hand (yes that long ago) would have the filthiest hands after handling the money,
2 Likes
that’s a thought, and why when the banks are stripping there staff and closing stores can they justify that they need to charge us when technology is doing the work now days
2 Likes
But they are not obliged to take it/use it. If they notify that they do not accept cash they are not legally bound to do so.
“However although transactions are to be in Australian currency unless otherwise agreed or specified, and Australian currency has legal tender status, Australian banknotes and coins do not necessarily have to be used in transactions and refusal to accept payment in legal tender banknotes and coins is not unlawful.”
3 Likes
No. Businesses try and negotiate merchant fees as low as possible. The same applies to loans, insurance, electricity etc, which comprise significant proportion of a businesses fixed costs.
Different businesses can charge slightly different credit card surcharges (some eftpos, Bpay etc). There can be slightly different charges as fixed service costs can be spread over different revenue base. They can also include any other reasonable business costs for providing credit card etc payment options to their customers. The ACCC provides information on surcharges here…
Some businesses also don’t charge surcharges at the point of sale. This it doesn’t mean the customer isn’t paying them. They are factored into the service/product sale price and customers indirectly pay that way.
3 Likes
All of our local takeaways either only take card or prefer card payment & ALL of them charge a fee. We have no way around not paying a card fee (credit/ debit/eft) unless we pay cash.
I understand & respect what you wrote.
I will pay cash everytime as I refuse to pay the card fee. If in a cafe/ eatery/ restaurant, I would rather leave that “extra charge” as a tip to be shared amongst the staff (cleaners included).
I still only use cash at the supermarket, local fresh produce place, butchers & bakeries too.
5 Likes
However Cash is quickly becoming the outlier in financial transactions in Australia (and some other Countries).
True and cash puts the dollar in a pocket. But cash becoming the outlier is easily explained beyond mere convenience or potential security (or related fraudulent transactions) because a card transaction puts a dollar in a pocket, and another dollar in another pocket, (both out of your own pocket one way or another), directly or indirectly.
1 Like
I don’t know what’s the fuss is about? They ask me each time “cash or card?”. Means I can choose. Other business charge me more then .5% whithout asking, but charging me even if I pay cash!
1 Like
