Nets
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lets see the toothless tiger in action
CASE concerned about impending NETS fee hike
By Wong Siew Ying, Channel NewsAsia | Posted: 04 June 2007 2053 hrs
SINGAPORE: From July, retailers will have to pay a higher administrative fee to use NETS, the cashless payment system which was introduced some 22 years ago.
NETS has proposed to increase the fee three to four times.
So, many businesses who rely on the NETS system, are not very happy.
The Consumers Association of Singapore (CASE) is taking its unhappiness one step further.
The consumer watchdog plans to lodge a complaint against the fee hike to the Competition Commission of Singapore.
NETS transactions account for 50 per cent of total sales at mobile phone store The Handphone Shop – with cash making up 40 per cent, debit and credit cards 10 per cent.
Store manager Tony Wong estimates that he may have to pay an additional S$5,000 a month in NETS levy when the adjustment kicks in.
"We might have to up prices, our business cost will go up, we will try to ask customers to pay cash, but it's tough. Sometimes they buy a few phones, and they don't have enough cash, and they never return after they go to the ATM," he said.
Currently, the fee NETS levied on businesses is between 0.35 and 0.55 per cent of the purchases.
But starting July, this will be increased to 1.5 to 1.8 per cent, which will be phased in over three months.
This will bring it close to credit card transaction fees.
NETS, which is owned by DBS, OCBC and UOB, said the hike is necessary to stay competitive against international debit cards, which have higher charges and offer more attractive returns to card issuers.
So it is re-aligning its business model to that of international debit card schemes, and this involves paying an interchange fee, which is a fee paid to the card issuers for transactions processed by NETS.
But CASE is not buying that explanation. Its president, Yeo Guat Kwang, said: "You are telling me, you know now Toyota has to also fetch the same price as a Lexus... is this a reason? I don't see this as a reason, you can't accept such a reason.
"If it is cost factors, then they must come out to justify what are the main reasons... what are the key cost factors which will make them think that the current fee that they are charging, 0.3 to 0.55 is too low. Too low in what sense? Can't cover all the cost, or is the profit not enough?"
CASE is also worried that businesses may pass the cost increase to the consumers.
Although existing regulations do not allow this, Mr Yeo said retailers could still tweak product prices if they want to.
Another concern is the timing of the fee hike.
The consumer watchdog fears that with the rise in the goods and services tax happening concurrently in July, it could unsettle consumers and cause confusion in pricing.
CASE has also decided to raise the issue with the Competition Commission of Singapore.
"They have been given this monopolistic mode of operation... because we see this as a basic infrastructure, to provide a basic mode of payment for all Singaporeans.
"So they canÂ’t just come out and tell Singaporeans now 'I see this as ... purely a commercial decision'," says Mr Yeo.
With some 30,000 NETS payment points across the island, CASE says NETS has a leading share of low cost cashless transactions.
It is not only the preferred mode of payment for most Singaporeans, but it is also used by over 80 per cent of HDB retailers.
But NETS says it plans to help small- and medium-sized merchants by offering a one-off rebate of up to 25 per cent until the end of the year.
A series of marketing programmes have also been lined up to drive sales. - CNA/yy
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It is a show time !!!!!
To sidetrack Increase of GST in July mah,Sillyporeans !!!! -
Then people start switching to debit cards, then nets don't make enough, then the cycle goes on again.
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That why i never use nets..
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Pay And Pay.
Cold Hard Cash. -
New election tactic?
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Cash is king.
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Who will win?
Nets vs Case?
Pu yr bet man!!!! -
"NETS, which is owned by DBS, OCBC and UOB, said the hike is necessary to stay competitive against international debit cards, which have higher charges and offer more attractive returns to card issuers. "
My question is: Why the f u c k is that a consumer's problem? Are all these issuers staff with no one else except for govt bureaucrats?
