EYE-BALL Guru on – BANKS … Desperado’s inflicting more pain … a follow up …

October 2, 2011
BANKS … desperado’s inflicting more pain … a follow up
The ABC ran a story on the EFTPOS new fees overnight – the linked story is posted below:


Eftpos customers face new debit card fees    Updated September 30, 2011 23:25:25-

Australian shoppers are being warned they may be charged a new fee from today when using debit cards at eftpos machines.

Retailers will be now be charged a fee every time something worth $15 or more is put through on a debit card.

The company which runs eftpos, ePAL, says it needs to increase its charges so that banks can afford to invest in new debit card technology.

One business which provides eftpos services says the major banks could earn $150 million a year.

When eftpos technology was first introduced, it was the cardholder’s bank which paid the 5 cent fee for the transaction with the retailer’s bank.

That was designed to minimise the cost to the retailer and so encourage the uptake in retail outlets.

It succeeded magnificently; there are now about 2 billion eftpos transactions in Australia each year.

But from today the retailer’s bank will pay the 5 cent fee.

Russell Zimmerman, the executive director of the Australian Retailers Association, says some businesses may absorb the fee.

“Some retailers will need to surcharge but I think you’ll find the majority of our retailers out there will not be surcharging,” he said.

“They don’t surcharge currently for Visa credit cards or Mastercards and the same with both of those schemes, and often don’t charge for American Express or Diner’s Club cards, which often have a much higher interchange fee than what eftpos has.”

But Mr Zimmerman says some retailers may need to charge a small fee.

“For some retailers, particularly retailers in very low profit rating … you may see them come up and decide that they’re going to charge a small fee at the counter,” he said.

“There are all sorts of retailers that have got high-volume, low-profit-margin goods and those retailers will need to consider whether or not they need to surcharge.”

Up against the banks

The company which manages eftpos, ePAL, is owned by the big four banks along with Coles and Woolworths.

A spokesman declined an interview but says the charge was designed to deliver more money for debit card technology so it could compete against the new chip technology being used in credit cards.

Jost Stollman’s company Tyro provides the eftpos banking services for many retailers, competing against the banks for the business.

He now faces paying the charge without receiving any money in return, so is at an instant disadvantage.

“For our merchants and for us, this is a very significant change in the fee structure in the Australian market,” he said.

“Take the example of a small newsagent. He’s actually competing with Coles and Woolworths when he sells his newspaper and if he is charged 5 cents more or less on each transaction [that] makes a difference to his bottom line.”

Mr Stollman says if the banks pass on the charge to retailers and pocket it as card-holding banks, they could reap $150 million a year.

Westpac says it will pass on the charge. ANZ says it has not decided what to do, while the Commonwealth Bank and the National Australia Bank have not yet responded to the ABC’s request for comment.

‘Way over the top’

Consumer group Choice is worried the retailers will now pass the extra cost on to customers.

Spokesman Christopher Zinn believes what used to be a free swipe will end up costing something.

“I have already found a Chinese restaurant in Bondi that last week, before any changes, was charging a 2 per cent fee for eftpos,” he said.

“Now if you bear in mind that $15 is free, there’s no fee for $15 and after $15 it’s 4 or 5 cents, there’s really no justification for any kind of fee with percentages.
“It’s way over the top. I’m afraid either through ignorance or opportunism we’re starting to see these fees creep in and I think consumers need to be aware of that, resist and question them where they can.”

This is a ‘buyer beware’ notice – having conditioned most of society to live cashlessly – imposing more fees to use a Debit Card is a low act – The $30 billion the Banks made last year and forecast to make again this year – surely they can cover their own Research and Development costs –

Please – you name me a product launch where intending buyers pay up front for the R&D outlays incurred by the developer …

The Regulators and Consumer Watchdogs – too long in the pockets of big business – are again asleep at the wheel – for Banks to even think they can get away with this yields forth the perception that they know they can get a way with anything ..

This is wrong and it can not be said loud enough – it’s ‘crap’ and I urge you all to live a sample of ‘crap’ in your MP’s mailbag to let them know how crappy it is.

Link to previous post on this issue: Banks – Desperardo’s Inflicting – More Pain for their own mistakes


The EYE-BALL Guru …

  1. Lucifer
    October 2, 2011 at 9:58 am

    Fry the bastards … they have caused more pain and suffering than all the World Wars put together –

    Not deaths – but in some cases people have preferred to take their own lives rather than live with that enduring feeling of anguish – of never getting ahead and being over your head in trying to keep the Banks and their debt collectors at bay …

    Bankers are now dispised worse than real estate agents … if you have a good Banker – tell them so and stick with them …

    Lucifer … (Based on tales from the afterlife and those who find themselves in my kitchen…)

  2. Cowboy
    October 2, 2011 at 10:02 am

    We’d love to hang them over here … they know full well their roll in the GFC and they have no remorse – no contrition – no interest inchanging their ways …

    Cowboy …

  3. HissyFit
    October 2, 2011 at 10:08 am

    Dip then in oil and slow roast them –

    Let them feel the slow burn they squeeze on all the clients they entrap into a debt cycle they can never escape from – only when the Bank has everything do people realise the real cost of trusting a Banker –

    Dispicable policies deserve dispicable remedies …


  4. Herman
    October 4, 2011 at 10:58 am

    The current ECB debate on taxing banks is illuminating. The very thought that bank equity has a put on government (bail outs) is at the core. It is what the Australian government was asking about a guarantee on deposits. What is the right way to price this? Nothing eventuated.

    The British and American banks vehemently oppose this, particularly saying it has to be unilateral across all countries. Can it stop at a border?

    At the very core of this is “too big to fail”. This means many things, and amongst them is exalted status. When they charge wanton and userous fees they are not subject to the same probity that is applied to the likes of utilities. Their excess returns becomes normal, and all type of elitist attitudes are applied to them. Competition should fix this, but an oligopoly rarely competes on price. It appears as if there is pricing collusion even if it is not tacit. The banks ape one another regarding fees and logic.

    Today we have Tax Forum 2011. It will start to widen the debate. Broadening the Mining Royalty tax to include gold is a no brainer. Restructuring Stamp duty on conveyance to a more broadly based land tax is already faltering despite being recommended in the Henry Report, because of electoral consequence. So what chance is a banking license fee. The real vested interest is the superannuation funds, their excess return, and who dominates the superannuation industry, the bankers.

    In what industry can they put a levy on customers to pay for research and development? (Credit card fraud). A particularly inefficient and protected one. Research and Development are normal costs, not extraordinary. Our regulators need to get real.

  5. October 4, 2011 at 11:16 am

    There is great consternation out of the Brits over the ECB plans to tax transactions – and rightly so by reasons given ..

    Guru prospered an idea to help the Regulators face their demons when it came to ‘speculators’ and the HFT’s – (High Frequency Trades) – and that was to scaling tax the capital gain if the traded asset was disposed of within regulated time frames…

    The one thing the Financial Markets needs is for the’hot money’ to chill in its search for capital protection and the damage it causes as a result …

    Forcing Investors/Traders/Fund Managers to consider a high – say 90% tax on assets disposed of within six months of their purchase – and a sliding scale stretching out to 3 years before the ‘capital gain’ is taxed at normal rates – before they buy on a whim looking for safe and easy profits through sheer weight of money forcing markets to respond … will squash the markets …

    That is what is needed to for capitalism and life as we know it to have any chance of survival …

    If in the three years grace – Regulators and Leaders are unable to structure a better accounted for system – then it is the system that is broken – not the will to fix it.

    Everything we hear and have heard since 2008 – is a band-aid fix – an after the fact remedy that is not prepared for the markets next trick to fool and dupe regulators … the market is far too smart and too far ahead in the game for regulators to play catch-up. The Game has to be changed and a handicap levied on the ‘speculators’ to bring them asunder …

    It’s radical – its not ‘free’ markets – its confining – but it does trap capital and gives the world some breathing space – if the speculators wither on the vine then their carpetbagger contribution will not be missed.

    Question is if Leaders have the balls to instruct eachother to do it globally and build the baseload protection the markets need to clear themselves of the backwash piled up and set to drive them even lower …

  6. BuddaBalls
    October 4, 2011 at 11:31 am

    The experts at the Tax Forum today will have no thought of what you are about GURU – mores the pity … you speak with a wisdom that is from a far off place … and not mainstream in any way …

    BuddaBalls …

  7. Herman
    October 5, 2011 at 8:36 am

    The first aim of economics is to allocate resources efficiently. That is rational, but not that easily understood or explained. A disparity in incomes is expected to address varying contributions, but what is the right ratio between the poverty line, and executive salaries. Bank CEO’s are earning from $4 to $8 million (too often plus plus) while clerks in banks earn $45,000. As much as 100 times. Bank CEO’s claim they are entitled to this, because that is commensurate with what they might earn if working for themselves. The poverty line is lower again. (think of single parent pensions or storeman and packers). This elitist attitude is part of the beginning. One group is fighting for the right to keep the European chalet in retirement or divorce, while the other just wants to buy their child that present or take them shopping rather than focussing on their own depression.

    Now we get to the hard part. Here is two speeds, the haves and the have nots. One who spends wantonly, and whimsically, while other would just love to see prime meat on their plate at home rather than in the butcher shop (or the garbage bin behind the toffy restaurant where it was sent back because it was too well done). You can build more gaols to house the miscontents, or you can simply have some empathy for those who are doing it tough, and share them a bob or two.

    The hard part to understand here, is those bank bailouts. Where all the cards were meant to fall, they didn’t fall, they were caught by the state (the bailouts) who now have to cut back on welfare recipients to carry that load. I will have to do some work on the stats. This dopey income disparity.

    There has got to be something wrong here.

  8. October 5, 2011 at 9:16 am

    Again Herman – you raise the interesting point …

    I have pondered this from many angles and for a long period of time – the GFC bailouts – sure the Banks were saved – but who owned the Banks – shareholders …

    Who gets the biggest tax breaks in business … shareholders ….

    Who are shareholders …. Fund Managers on behalf of vested superannuants … and who gets the big bonus’s when the share market goes up – the Fund Managers … and takes the hit when the market goes down …. the superannuants …

    Somewhere in that mix there are many flaws ….

    Short term investment in equities looking for capital gain against 30-50 year investments … another mismatch …

    If the Banks were allowed to fail – who would have lost … not the depositors as their funds are insured [or part insured to cap levels] – the borrowers were safe … it would have been the shareholders – so the GFC bailout was a shareholder bailout – and who owned all the Bank shares … speculators – [on behalf of fund managers] – chasing the quick buck …

    The got it horribly wrong then … the regulators were protecting the wrong people … again history should have taught them lessons but the panic and pressure of living the meltdown … caused decisions looking at a next day, next week fix as opposed to looking far beyond …

    This mess was 40 years in the making – from when the gold standard was abolished … it will take an eternity to fix …

    The first order of business should be :

    – take all tax incentives away from shareholders and make them pay the highest tax rate in the land … for it is shareholders punting of some CEO to make them money … levy them for the privilege …

    – Then Tax all capital gain … housing, equities, race horses, anything purchased with the intent to sell in less than a 4-5 year time frame …

    – Force Companies to pay their fair share of tax – limit losses carried forward – impose time constraints as to how long they can be carried forward …

    – Allow Families to use Superannuation to buy or fund their family home with austerity that if the home is sold – the superannuation equity is preserved …

    – Stop the rort where wealthy people can build their super at 15% tax to avoid marginal tax rates …

    – Allow minimum income superannuants to pay no tax until their super builds above a means tested benchmark … in line with estimates as to how much would be needed so no Government pension would be needed to be paid …

    I know an individual- worth $2m+ – still owns income producing assets – he is 70+ – has a share portfolio worth $1m+ – last year he paid no tax – and received a refund from the Tax Department for near $30k for franking credits …

    There is no fairness in a tax policy that allows this … he does not take a pension – yet he receives all the pensioner entitlements – i.e. cheap rates, fares, electricity etc . …

    There are millions of elderly out there with this sort of tax leniency … is it fair? – NO but it is legal …

    Still much to ponder about …

    GURU ….

  9. October 5, 2011 at 9:18 am

    You say it so much nicer that me Guru …


  10. BuddaBalls
    October 5, 2011 at 9:19 am

    Ditto … Guru …


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