Have the banks just pulled a swift one when it comes to accountability for EFTPOS transactions? How did they manage to get it under the radar of mainstream media?
On the surface the decision to make retailers carry the cost of EFTPOS fees seemed like a good thing for customers. Some of the bigger retailers have agreed to swallow the charges and not pass them on. That has to be good news doesn’t it? After all, why would we want to pay, when the shopkeepers will do it for us?
Well, in this edition of BTalk, economist Stephen King, Dean of the Faculty of Business and Economics at Monash University, explains why we should be concerned.
He says the move, introduced last week, hides the visibility of fees, which will now be passed on to us through higher prices for goods, whether we use a card or not. Without knowing how much the fees are, banks can increase them without us knowing. They are also agreed across all banks, so there is no competition between them to lower fees.
The original approach, in which our own bank charged the fee, meant we could see how much we were paying and, if we didn’t like it, we could switch banks.
It’s interesting that at a time when there’s a talk of the need for more bank competition that the banks pulled a move under the radar that has the opposite effect.