Phil Wicks: Small Business NZ founder says retailers shouldn't be making profits from card transaction fees

Acceptance that reviewing the way fees are charged for PayWave and online card transactions in New Zealand is a positive for all.

The Commerce Commission is consulting on regulation it says could save Kiwis $250 million.

People spend $1 billion each year on fees in-store and online.

Small Business New Zealand founder and BSP advisory group director Phil Wicks is questioning whether some retailers are taking advantage.

“There is quite a variation in fees. I mean at the end of the day, the retailers shouldn’t really be making profits from their EFTPOS. They should be making their profits from the goods and services that they sell.”

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Episode Transcript

Speaker 1 (00:00):
The Comments Commission. They're back for more, having dipped their
toes last week and do everything from supermarkets to telcos.
They're now suggesting that we could be two hundred and
fifty million dollars better off by cracking down on merchant
fees when we shop the markets dominated by master Card
and Visa. Small Business New Zealand founder and BSP Advisory
Group director Phil wixes with us on this Phil, Very
good morning to you.

Speaker 2 (00:19):
Good morning Mike. How are you very well?

Speaker 1 (00:20):
Thank you. Total fees are billion dollars. We could save
two hundred and fifty million. Their argument is fees here
are higher than they are off. Sure is that true?

Speaker 2 (00:29):
Yeah? I think it is. I mean I think we've
got a situation where we've got something that that's a
little bit more complex and it needs to be there
seems to be a wide variety and the fees that
are actually charged so it's not consistency. This would simplify
the process, provide greater fans experience. I think a lot
of people just stick their cards down without actually knowing
what they're paying, and we're reduced to cost both to

(00:50):
businesses and the consumer. And potentially I think there's still
retailers that don't use it, so perhaps we would get
a bit more take up. WI should speed things up.
I know the bank have sort of said it helps
pay for some of the costs they have associated with
fraud et cetera, et cetera. But I think they make
enough profit to cover that sort of thing.

Speaker 1 (01:08):
Having said that, why are they higher here? Is there
something unique about us that they can justify or they
just pick a number?

Speaker 2 (01:14):
No, I think I can't think of any reason why
they should be high here. I think the sort of
concerning thing is a little bit that they seem to
be creeping up. You know, I just noticed it the
other day when I don't normally look at it, but
I'll put my card down and I feel quite that's
over five percent I'm paying for that, and I hadn't
noticed that before. I think there's just the risk that
they could just slowly sort of creep up without people

(01:36):
knowing it.

Speaker 1 (01:37):
Are there scams going on with retailers who just pick
a number as well? And added on, well.

Speaker 2 (01:42):
I wonder that because there is, you know, there is
quite a variation in fees. I mean, at the end
of the day, the retailers shouldn't be really be making
sort of profits from their f posts. They should be
making the profits from there, from their goods and services
that they sell.

Speaker 1 (01:56):
What happens here the ComCom go yep, this is what
we want to do, and we picked a number. This
is the number. Take it or leave it? Is that
how that works? Potentially?

Speaker 2 (02:05):
Well, potentially potentially it does. I mean sometimes, you know,
you know, your sort of regulation can I think sometimes
can make things a lot worse in this But in
this case, you know, I've tried to look for a
downside from from our perspective, and I can't really see one.

Speaker 1 (02:20):
Okay, here's a text. As a hospital retailer, my merchant
fees have gone from one hundred and fifty dollars on
average per month to eight hundred and fifty dollars per month.
We don't pass that on. That's eight and a half
thousand dollars per aanter out is that? Does that sound
real to you?

Speaker 2 (02:33):
Yeah? It does, it probably probably does. You know, that's
that's probably a you know, it's a pretty good indication
of what I was saying before about how these some
of these things seems to have been sort of rising.

Speaker 1 (02:44):
And how much of it's on the consumer, because I mean,
in all honesty, I wouldn't have the slightest idea what
the fee is when I pay, I tap and go.
And that's how most of us operate, isn't it.

Speaker 2 (02:53):
But that's how most of us operate. And again that's
what I was saying before. You just you just stick
your card down. You don't really think about it, and
you like the process, you know, you know, we like
that process as opposed to put in the card. And so,
you know, like I say, most it's on the consumer.

Speaker 1 (03:09):
Good stuff, philp nice and sight. And we'll see where
the Commerce Commission takes this one. And boy they're busy
at the moment. Is this the season for the Commerce
Commission making a lot of decisions? For more from the
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