Pretty sure we all welcome the change in law earlier this month outlawing additional charges when paying for goods and services by debit or credit card. Airlines etc had been taking the Michael for years on this point.
But as ever there's another side.
Earlier this week I was waiting in payment queue at village store to pay for a few cans of beer. Chap ahead was topping up £20 each on his gas and electric card/key for prepayment meters. he paid, quite reasonably, with his debit card. Shop's owner took card but pointed out he was on verge of making these 'Pay Point' charges cash only. He gets fractions of a penny for processing these payments but has to pay for processing debit cards at say 13p per transaction so he's now loosing money where previously he couls have charged £1.50
Today I was on a work related course about managing fuel debt where we looked at disadvantages of pre-payment meters. So now, if you run out of credit unexpectedly, you've not only got to hope there's a shop open and get you're kids into push chair or car and go to it, you need cash as well.
Last edited by: VxFan on Sat 27 Jan 18 at 20:23
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Wouldn't someone in that predicament be more likely to have cash than access to a card?
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And paying an extra £1.50 to use a card is exploiting them too. If they have a card, I bet there's a cash point nearby so they could have always avoided the £1.50 charge. Stopping them using a card might be to their benefit.
So in the example by Bromptonaut, are you saying they got charge 2 x £1.50 to top up a gas an electric card by this retailer? That is outrageous exploitation of someone who is forced to have gas and electric meters.
Last edited by: rtj70 on Sat 27 Jan 18 at 01:29
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>> And paying an extra £1.50 to use a card is exploiting them too. If they
>> have a card, I bet there's a cash point nearby so they could have always
>> avoided the £1.50 charge. Stopping them using a card might be to their benefit.
I could/should have been clearer in the OP. While up to £1.50 was mentioned in conversation as to what some places had demanded the guy in the village charged, I think, 50p. That was levied on Pay Point, Lottery and any transaction under £8. Never paid it myself as shop is one of very few places I now use cash. Since I've had a 'touch and go' debit card even the sarnies from Greggs go on the card. If I still commuted I'd probably use it for the paper too.
There's no cash point at all in the village. It's been investigated but like Pay Point it would struggle to cover costs of installation, dedicated phone line etc. The convenience store in next village does have one but they're part of a chain so probably get a better deal from the cash machine provider than our guy who's independent.
Last edited by: Bromptonaut on Sat 27 Jan 18 at 13:31
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>> There's no cash point at all in the village.
I dont live in a village per say, but we do have a very successful small shopping parade that supports a very diverse and very local service*. We have for example a hardware store to die for where the guy knows where everything is, and everything you want he can get. They mobilised the other shopkeepers and the local populace to defeat a bid by tesco to buy the corner plots.
Thee have introduced a pragmatic approach to the card fee issue. The minimum spend limit. No transaction under £5 accepted by card.
*Two cashpoints, A curry house, a chippie, newsagent/post office, florist, butcher/deli, motor spares shop, hardware store, music store, dry cleaner, plumber, tile shop, pet shop/grooming parlour, estate agent, co/op, pub, cafe, Chinese, baker, chemist. Parking is free along the service side roads, rents are reasonable, and subsequently trade is good, with no closed units and only one charity shop (cleverly the RSPCA put their shop next to the pet shop/grooming parlour
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Its a tenner in our village at most places. Although a couple don't take cards yet. One of which is the greengrocers, I'm tempted to go in there and buy a couple of bananas and pay by cheque.
The butchers is pretty strict about it until the boss isn't there then you a tenner on the machine and they give you the rest back in cash.
I think in our village we've 4 cash machines but as it's the biggest village many come in and keep the shops going.
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>>*Two cashpoints......................... etc.
Wot, no bookies? There'd be one in a complex of that size around here.
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Yep you need a bookies and come to that where do you get your tattoos? A Cash Converters shop would make things complete.
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This is quite a big village and years ago sported a butcher, baker and probably a candle-stick maker too. When we moved here thirty years ago there were two independent shops, a small Co-op supermarket and a Post Office.
We're now down to one general store, probably struggling to remain viable and a sandwich-deli in what used to be the Post Office which closed after the owner/sub postmaster had a spat with Royal Mail. The deli is run by ex-postmaster's wife with viability assisted by fact she owns premises outright. We were without a post office for a year or so until the Pharmacy attached to the GP practice agreed to host it.
Two hairdressers and, until next month, a pet supplies store too.
Three pubs again now, one recently changed hands and refurbished. It and the canalside pub restaurant are owned by local chains. The third closes and re-opens on about a two year cycle as one mug after another is done over by the Pubco that owns it and loses their savings.
Mercifully no bookies. Ten a penny in Northampton though, four within 200 metres of my office.
Last edited by: Bromptonaut on Sat 27 Jan 18 at 17:06
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>> >>*Two cashpoints......................... etc.
>>
>> Wot, no bookies? There'd be one in a complex of that size around here.
This is Surrey, all the gambling is done in the city.
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>>No transaction under £5 accepted by card.
Interestingly we have just dropped this rule from our shops. Although fees are dear, the less cash we have as a business the cheaper to bank and the less of a risk of bring robbed
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>> >>No transaction under £5 accepted by card.
>>
>> Interestingly we have just dropped this rule from our shops. Although fees are dear, the
>> less cash we have as a business the cheaper to bank and the less of
>> a risk of bring robbed
I work in our community shop - surprising how many people now use contactless for trivial amounts. In theory we have a £3 minimum purchase. Several regulars use a debit card and take cashback, saving a trip to the nearest ATM.
Our two local pubs are now well conditioned to regulars who settle up with a card or phone before they leave, be it for one pint or several.
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All of our local pubs, indeed most of the ones I used in Surrey in the last year always ask if you want to run up a tab, and take your card. Mind to be fair, the cost of booze means that small bills in a pub are a thing of the past.
Last edited by: Zero on Sat 27 Jan 18 at 18:51
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At one time in the distant past it used to be illegal to sell drink on credit. I think it dated back to th First World War. Not sure when that law was changed.
It also used to be the norm if you were running a tab to hold your credit card behind the bar.
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A credit card is weird, Its not credit, yet it is credit.
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>> A credit card is weird, Its not credit, yet it is credit.
>>
Of course it's credit?
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Yes but not by the vendor of the goods or services provided. To them its as good as cash
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Ok, I see what was meant.
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>> All of our local pubs, indeed most of the ones I used in Surrey in
>> the last year always ask if you want to run up a tab, and take
>> your card. Mind to be fair, the cost of booze means that small bills in
>> a pub are a thing of the past.
Bit of an oddity in the UK I would have thought. I don't think, in pubs* anyway, that they run a tab up for me or on offer. Is it for all or a local thing? Quite common abroad I found, especially the US.
* unless I'm staying there, well apart from the other month I stopped over in a place in Bedfordshire and they looked at me like I had two heads when I asked to put it on the room bill.
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Most pubs I visit would offer a tab although more usual if you are buying food.
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I get the with food bit, but I think it's pretty rare if you went in just drinks to be offered a tab. I used to go out in Norwich a fair bit as well. Maybe it's just me!
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>> I get the with food bit, but I think it's pretty rare if you went
>> in just drinks to be offered a tab. I used to go out in Norwich
>> a fair bit as well. Maybe it's just me!
Must be, *just* you. I rarely enter a pub alone these days, (well I do with the dog sometimes) so the bill is clearly not going to be a half and packet of crips.
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> Must be, *just* you.
No doubt. I must be the dodgy looking type ;-)
Last edited by: sooty123 on Sat 27 Jan 18 at 20:41
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Pubs round here are quite happy to set up a tab, or a £10 minumum spend on a card. But since that’s only two pints and a packet of crisps it’s only lone drinkers who are disadvantaged by the card limit.
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>> Pretty sure we all welcome the change in law earlier this month outlawing additional charges
>> when paying for goods and services by debit or credit card. Airlines etc had been
>> taking the Michael for years on this point.
I don't welcome it. HMRC won't take cards now - and why should they?
>>
>> But as ever there's another side.
Of course there is. Why can't they leave well alone?
Last edited by: VxFan on Sat 27 Jan 18 at 20:25
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>> Of course there is. Why can't they leave well alone?
because the likes of Ryan Air need their bums kicked for taking the pee.
And you shouldnt be paying the likes of HMRC by card, use electronic transfer like every other normal person.
Last edited by: Zero on Sat 27 Jan 18 at 08:42
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>> >> Of course there is. Why can't they leave well alone?
>>
>> because the likes of Ryan Air need their bums kicked for taking the pee.
>>
Yes but it's two different issues, one of exploitation (charging £1.50 for a £10 transaction) and one of transparency. The airlines were the latter where your flights were quoted as, say £150 though you couldn't actually pay £150 because if you paid by debit card it was £157.50 and if you paid by credit card it was £165, and you had no other choices.
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>> And you shouldnt be paying the likes of HMRC by card, use electronic transfer like
>> every other normal person.
>>
Paying HMRC by debit card is actually much easier than electronic transfer these days. It's credit card they don't like.
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>> And you shouldnt be paying the likes of HMRC by card, use electronic transfer like
>> every other normal person.
>>
As usual I wasn't thinking of myself, but of others less financially stable.
Last edited by: Duncan on Sat 27 Jan 18 at 10:08
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I wasn’t aware that using a debit card was a sign of financial instability... ;)
The EU has dreamt up these changes completely oblivious to how a business operates.
Before this change as a consumer I had a choice. Let’s take booking a flight or holiday with BA. Under the old rules, I could pay debit card for ‘free’ or by credit card for whatever that cost. Paying by credit card then gave me a whole raft of other consumer protection. Now BA can’t charge those paying by credit card more. But they’re not going to forgo the income, so prices to everyone go up. Effectively by paying with a debit card I’m subsiding those who pay by credit card. Madness. It’s even worse if you use apps like Just Eat, as they’ve replaced the credit card charge with a service charge. Which you have to pay even when paying by cash!
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>> The EU has dreamt up these changes completely oblivious to how a business operates.
>> Before this change as a consumer I had a choice.
Lets take Ryan Air, who only take bookings by card, and then charge you over the odds for doing so. Blame them and their ilk, not the EU.
Last edited by: Zero on Sat 27 Jan 18 at 10:45
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And I could avoid that by choosing to not use companies that had that approach. Which is one of the reasons I never fly Ryanair. But Ryanair’s not going to forgo the income either, or lose it’s headline 99p flights. So the ‘burden’ will shift from those that paid by credit card to everyone.
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>> And I could avoid that by choosing to not use companies that had that approach.
>> Which is one of the reasons I never fly Ryanair. But Ryanair’s not going to
>> forgo the income either, or lose it’s headline 99p flights. So the ‘burden’ will shift
>> from those that paid by credit card to everyone.
But At least its transparent and not deliberately fraudulent.
Last edited by: Zero on Sat 27 Jan 18 at 11:03
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"Lets take Ryan Air, who only take bookings by card, and then charge you over the odds for doing so"
If credit card is the only way to pay Ryanair, and there is a fee for doing so, then simply regard it as part of the cost of the flight. It isn't quite as cheap as you thought - it isn't a difficult concept. Personally, I avoid Ryanair like the plague.
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>> "Lets take Ryan Air, who only take bookings by card, and then charge you over
>> the odds for doing so"
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>> If credit card is the only way to pay Ryanair, and there is a fee
>> for doing so, then simply regard it as part of the cost of the flight.
True deliberate deception not a difficult concept merely one that I disprove of. Thats nor a difficult concept to grasp for you is it?
As for avoiding Ryan Air like the plague, if they offer a fare and service to a place at a total price no-one else can match, then why not use them albeit its a not a pleasant experience, but you pay for what you get, its just nice if that made clear up front.
Last edited by: Zero on Sat 27 Jan 18 at 11:14
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"Thats nor a difficult concept to grasp for you is it?"
Of course not; but we are talking Ryanair, so deception is all part of the game. That isn't too difficult a concept for you, is it?
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For me no Its a concept I had to explain to you.
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" Its a concept I had to explain to you."
Mr O'Leary's deviousness is not a new concept to me.
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Yet you seem perfectly happy to support and promote the environment that aids his behaviour.
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"The EU has dreamt up these changes completely oblivious to how a business operates............ "
I agree with all of that; I always understood that a fee charged for credit card use was there to recompense the payee for the charges made by the credit card company. The person using the credit card has various benefits including a month's credit. For example, when renewing my car-tax online, I have the option of debit card or credit card + fee; I always opt for the former.
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>> "The EU has dreamt up these changes completely oblivious to how a business operates............ "
>>
>> I agree with all of that; I always understood that a fee charged for credit
>> card use was there to recompense the payee for the charges made by the credit
>> card company.
Except of course they add a charge above that charged by the credit card company.
What everyone seems to be missing is that we should be looking at the level of the merchant fees charged. Handling cash and cheques is much more expensive for the bank than electronic payments, which at the end of the day is all a payment card is.
Last edited by: Zero on Sat 27 Jan 18 at 11:17
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>> What everyone seems to be missing is that we should be looking at the level
>> of the merchant fees charged. Handling cash and cheques is much more expensive for the
>> bank than electronic payments, which at the end of the day is all a payment
>> card is.
Absolutely right. If businesses were passing on the cost of disbursements for processing the txn then the amounts would generally be a lot lower. Do that for cash and it would probably be the most expensive way to pay. Complicated, but fair, sort of. Lots of complication including with VAT.
Remember a few years ago when various retailers including M&S declared their prices to be inclusive of a 2.5% card processing fee? So they accounted for £100 sale e.g. by breaking it down into (at 20% VAT):
Ex Vat price £81.30
VAT £ 16.26
Fee £ 2.44
instead of 83.33 + 16.67 VAT, hence saving themselves 41p VAT on every £100 sale. HMRC won the case, eventually.
There's a lot more to this than any newspaper or news website will bother to find out or to tell you.
For years the EU competition authorities were concerned with lack of competition on merchant fees. I'm not writing it out again, I posted this in 2015:
(The problem, for anybody not familiar with it, is that most of the merchant fee on card transactions consists of the interchange fee, levied by the network (e.g Visa or Mastercard) via the payment processor and given to the issuer. This is a major part of the income of a card issuer and is essentially what funds your interest-free period. There is no competitive pressure in this at all because shops have to accept all cards (or none) from a network, and charge the same price to everybody. A brilliant wheeze the industry came up with was 'premium cards' offering more cardholder benefits and cashbacks. These cards carry a higher interchange fee, which just carries through into retailer pricing. The only way to contain this is through regulation).
The industry as can be imagined was very annoyed about downward regulatory pressure on interchange and the retailers of course were happy. Credit card interchange has indeed come down but the networks have responded by pushing up debit card txn fees.
PeterS is right to say that customers paying by card are subsidised by those who don't, but only up to a point. Credit card customers are subsidised by debit card payers. But if everybody paid cash, prices would go up.
As for Ryanair - just adding on what they can get away with. No different to Motorpoint's "administration" fees and cinema booking fees. The only way to look at it is to consider what you pay and what you get - When they have done that a lot of people still want to fly Ryanair.
What might result from this is a lot of people using credit cards where they would have used debit - which will result in higher seller costs and ultimately higher prices.
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>> It’s even worse if you use apps like Just Eat, as they’ve replaced
>> the credit card charge with a service charge. Which you have to pay even when
>> paying by cash!
The business model of apps like Just eat is all about creaming money out of the purchase chain somewhere. Someone is paying more then they used to before their existence. Like a parasite they add no value, just feed on what previously existed.
Last edited by: Zero on Sat 27 Jan 18 at 11:06
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True, but a large and fundamental part of all their business models is driving up transaction volumes by making it far easier to spend money, and then taking a slice of it. eBay has created a market that didn’t really exist outside of classified ads and car boot sales, which were too much hassle for most people. And just eat has driven an increase in consumer spend on takeaway / delivered food in city locations at least, in part by making it easy for restaurants to move into delivered meals opening up new markets to them. So to say that they add new value is probably missing part of the point. There’s value to the consumer in increased choice, and there’s value to the retailer in increased sales. They have to decide whether the sales increase is enough to cover the cost though
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>> As usual I wasn't thinking of myself, but of others less financially stable.
Anyone who has a debit card is financially stable, anyone who pays HMRC with a credit card is mad.
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A further unintended consequence could be the shop in the OP would then be handling more cash which could make it a target for crime.
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On nearly every count, cash is inconvenient hassle.
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Cash is, for most people, dead. I’ve just spent three days in Spain and had no sterling or euros in my wallet. At no point did I need cash. I only *need* cash for our local chippy, as they don’t take cards. But given the quality of the fish and chips, and the length of the queues, they clearly don’t see the need, and I’m happy to go to the cash machine just for that :)
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>> Cash is, for most people, dead. I’ve just spent three days in Spain and had
>> no sterling or euros in my wallet. At no point did I need cash.
It's been all but dead for me for years. I haven't withdrawn or carried cash on me at all in 2018 yet. It really will be something out of the ordinary that prompts me to go to the cashpoint.
Every retailer I use on anything like a regular basis will accept a debit card or Android Pay. Even the local pubs and the local chippy.
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"I haven't withdrawn or carried cash on me at all in 2018 yet. "
You clearly don't buy your veggies on Bury market ;-)
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A problem with using cards exclusively is fraud. How many check their spending against statements? I use cash for small sums because I know I can't keep track if I used my cards for everything.
I've had a retailer attempt a double transaction for a single purchase. I suspect I wasn't the only person they've tried it on.
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I never leave the house without cash, and rarely less than fifty quid. Nature of my job means that I get impromptu nights away; not all places accept cards for overnight parking and if I had to offer plastic at a roadside breakfast bar I daresay I'd get a very old-fashioned response!
I'm also alive to the prospect of a debit card not working when you want it to, had that more than once, so having cash is a useful alternative.
For those whose interaction with the outside world is limited to a weekly shop and lunch at a pub, going cashless is probably fine; but it doesn't work for me.
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Unintended Consequences - Hard Cheese
