Cash costs too

January 19, 2010

Why the fuss about some businesses choosing to charge people who pay by credit card?

It’s just user pays.

Credit card companies charge businesses for each transaction they process and if the card user doesn’t pay every customer has to which doesn’t seem fair.

That’s why some businesses offer a discount for cash, although as the   ODT editorial points out, that incurs a cost for businesses too.

Executive vice-president of Visa Europe Steve Perry, reported in Britain’s Daily Telegraph newspaper, suggests that for the economy as a whole, using cash is an expensive way of making payments.

The total cost to society of making payments by cash, cheques and cards equates to 2%-3% of GDP, and handling cash accounts for two-thirds of the cost, he estimates.

As well, for a retailer, handling cash costs as much as the transaction fee on a credit card.

He argues cards are less risky than cash, more efficient and better value.

This explains why most shops don’t usually mind if customers ask for some cash when they pay by EFTPOS. It saves them the time and expense of banking notes and coins.

It would be a brave business which took the next step and tried to charge a customer for paying by cash. 

But they could encourage people to stop paying by credit card or cash by offering discounts for EFTPOS or direct payments via the internet.

Credit card crisis

June 30, 2009

If there’s a good time to be told your Visa card has been declined, at the airport just before departing overseas isn’t it.

But full marks to the lovely people at the National Bank and Visa who sorted it for me in about 30 minutes.

I phoned our banker who did some investigation then contacted the Visa people, one of whom phoned me straight back.

She explained that a transaction in Spain at midnight yesterday had triggered a fraud alert so they’d frozen the card until they’d checked that it was legitimate.

I knew what the transaction was, the woman cleared the block, took the details of our itinerary so they know what to expect and gave me a phone number to call from anywhere in the world if I have another problem.

I’m very impressed by their security consciousness. Better a minor hiccup than a raid on a credit card.

And while a problem with a credit card isn’t welcome, it’s not as bad as losing your passport.

Veni vidi velcro

March 2, 2009


“Veni, vidi velcro,”  Ginette McDonald proclaimed at the Last Night of the Proms in the Oamaru Opera Hosue On Saturday night.

She then translated it, somewhat loosely, as: “I came, I saw, I stuck around.”

A quick Google search showed it’s not original and uncovered several more adaptations of  Ceasar’s veni, vidi, vici including:

Veni, vidi, vino – I came, I saw, I drank; veni, vidi, Visa – I came, I saw, I shopped; and veni, vidi, Verdi – I came, I saw, I composed an Opera.

Points for paying back

August 11, 2008

The ANZ has developed a points scheme for customers who pay back all they owe their credit cards each month.

The Everyday Rewards Visa is aimed at customers who pay their balance in full every month and replaces points for purchases with points when they pay back money spent.

Credit cards generally have the highest interest rate for unsecured credit (with the dishonerable exception of loan sharks). It’s a sad indication of financial illiteracy that a lot of people don’t realise they’d be better taking a bank loan or increasing the mortgage rather than racking up credit debts they can’t pay back in full.

However, this scheme is an interesting concept which gives an incentive to the prudent and it might appeal to people who don’t realise the very high interest rates on credit card debt means paying the balance in full on or before the due date provides a reward in itself.

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