NETS transaction fee to go up by 450% come July 1
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yes, they "encourage" the use of NETS, "encourage" can be done simply by verbal means.Originally posted by red_amoeba:KNN, the three banks that form the NETS have reported record results and they are now bitching that they have to raise rates to stay competitive? What is the logic?
Can they ever offer the same rates / perks that credit card / debit companies offer? Don't forget, DBS, UOB & OCBC also issue credit cards - they are fighting their own products and the way they say it is like credit cards are some foreign competitors when in actual fact, its a thinly veiled excuse to raise yet more profits.
For me, its okay, I have given up on NETS and use cash / credit cards - but for those who has no abilities to own a credit card - its gonna be a problem. For more than 20+ years, we have brought up to the convenience of using NETS and there was recently a campagin to encourage higher use of NETS as cashless transactions - these are contradicting.
I am damm sure the merchants will pass on this % to consumers - as it is, some shops either don't accept credit cards or ask for 10% surcharge for credit card. Its going against the call for cashless & seamless payment. I am disgusted - its pure greed at play. I say, lets boycott the nets & even GIRO - cos very soon, they might increase the fees for GIRO too.
They never said they are going to "support" it, which "support" needs action. -
WTF
I like to use NETS so I don't have to carry so much cash
I might as well charge everything to my credit card now -
Madam Poh is the new CEO in NETS. She has brought in a lot of restructuring within NETS, incl. aligning the sales team to be sector driven, etc.
It is totally not agreeable with NETS statement that the reason for the fee hike is to stay competitive. It is viewed that the real reason of the blatant hike is exactly because NETS has no direct competitor. [IMHO credit/debit card are not direct competitors because a bigger population doesn't have it, and the difference in fees of the 2 has 'room for growth'].
I think NETS decision for the fee hike is counter-logic. Does it mean with the increase in competition, e.g. Telco in local shore, that our incumbent should increase rates per minute, NO, the strategy for growth is guard the local fortress and expand overseas, which is what SingTel has been doing very well.
With Madam Poh's explanation, may be she can elaborate out of the increased fee hike, how much of the % goes to the benefit of the banks in competition with the likes of debit card. As long as the rates enjoyed by the banks are lower than the debit card, the banks will still happily promoting the use of debit card.
I think it is time for the Ezlink for non-transit business to bring in some real competition here. And may be Singaporeans should give some support to Ezlink retail for small purchases. -
pls let me ask a noob question!
wad's the diff between nets and debit? -
And a 450% increase with the GST hike is not considered profiteering
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NETS use PINS numb to deduct directly from your account whereas debit card uses signature to deduct from accountOriginally posted by ChoCoChips:pls let me ask a noob question!
wad's the diff between nets and debit? -
earn points from credit card tooOriginally posted by elindra:WTF
I like to use NETS so I don't have to carry so much cash
I might as well charge everything to my credit card now
i suppose if use NETS to pay bill via S.A.M or AXS also need to bear the charges? -
let's see what CASE can do for the consumer. I think barking dogs don't bite. This will only resolve if MAS steps in as NETS is already a monopoly. Minster of Finance. where are you?
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The NETS are owned by the banks
Yeah, to increase their big fat profits -
Oh well, banks....the legal loan sharks.
This sounds all too familiar, right? I want to increase, I shall do it. Why?
Because I control the market and no one else can offer the same service.
Lan lan
What are we teaching our kids today?
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then what about credit card, visa and debit? whats the differenceOriginally posted by pqr:NETS use PINS numb to deduct directly from your account whereas debit card uses signature to deduct from account
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this is exactly the kind of low quality thinking process that i will teach my kids NOT to engage inOriginally posted by Rock^Star:Oh well, banks....the legal loan sharks.
This sounds all too familiar, right? I want to increase, I shall do it. Why?
Because I control the market and no one else can offer the same service.
Lan lan
What are we teaching our kids today? -
NETS it bah!!!
let talk about VISA, MASTER, AMEX an JBC. in some country the shop has 2 price label, ie to say one you pay cash and the other you pay using card.
guess what most ppl there do? pay cash lar.
the SG shop should do it this way, shopper should pay for his or her own convenience.
it will be best SG shop have 3 price tag.
1st tag price you pay in cash say the item is $1 with GST.
2nd tag price you pay using credit/debit card still the same price with paying cash. (shop has no reason to add on anything when it had been on going for times unless "they" also like to increase the fees.)
3rd price tag you pay with NETS with whatever fees increase add on.
Oh no, for those using MRT and buses, get ready for fare hike. -
i think the one which die the hardest is the post office..
i think SAM machines do not take anything other than NETS -
The CEO said
"We've been providing Toyota quality service for the past 22 year though we have been charging at bus fare rates"
Yeah... Once ppl decides to stop using NETS... See how they're going to survive... -
Oh myOriginally posted by the Bear:i think the one which die the hardest is the post office..
i think SAM machines do not take anything other than NETS -
For those who don't have credit cards, pay by cash bah...
For those who have credit cards....time to change banks liao...
Is Diners local? -
switch to using EZlink card to pay for stuff....
then later, they too may charge a fee -
May 18, 2007
Nets fee hike angers retailers
THE NETS cashcard network will be increasing its transaction fee for retailers, in stages from July 1 - by about three times.
It had previously announced in January this year that it will raise the fee by between 0.75 and 2 per cent from April.
But retailers told The Straits Times that this levy, currently pegged at around 0.35 to 0.55 per cent of transactions, will go up to between 1.5 and 1.8 per cent.
This fee hike will be staggered between July and September. No other details were given.
NETS, or the Network for Electronic Transfers, is owned by DBS, OCBC and UOB. Its card, used by 83 per cent of Singapore residents, is popular as an alternative to cash and credit cards.
Retailers like it too as they get their money upfront.
But many retailers have been upset since NETS first announced the hike.
Some have advised consumers that, with the hike, they should either pay in cash or expect their purchases to cost more.
Chairman of People's Park Traders' Association Poh Boon Pang, 60, who owns an organic food store, said to gear up for the Nets fee increase, he has started telling his customers to pay by cash. Otherwise, he will pass on the fee hike to them, he said.
But one shopper, graphic designer Jackson Tan, 28, does not buy this argument.
'If merchants can shoulder credit card transaction fees, why can they not take on the fees for Nets too?' he asked. -
Hike for merchants is Net loss
'Monopolistic' move defeats aim of a cashless society Doesn't this translate into yet another price increase? Debit cards not so common Encourage Nets, not hinder it
Thursday • June 7, 2007
Letter from Cheng Shoong Tat
Letter from Jayandran Sandra Alison
Letter from Punitha Govindasamy
Letter from Harry Chia
I cannot agree more with the Consumers Association of Singapore that Nets' decision to raise its levy on businesses amounts to an abuse of its "monopolistic" position, and this should certainly be investigated by the Competition Commission Singapore.
Nets is a supplier of a basic service and should be regulated as such. Nets claims it has to increase the levy because it faces competition from international debit cards that offer higher returns to card issuers. If that were true, would Nets do away with the proposed increase for retailers who agree to accept only Nets and no other international debit cards?
The three local banks, as Nets' shareholders, should see Nets as their contribution to making Singapore a cashless society, rather than a purely business vehicle to milk more profit. After all, the three banks are not losing money from Nets as it serves to increase banking transactions and revenues.
Where do the three banks stand on this issue? The public would like to hear from them, too.
The announcement of the Nets fee hike is likely to have Singaporeans up in arms about yet another fee hike. Granted, the charges are being borne by the retailers, but many of us already feel that these increases will be passed on to consumers either directly or indirectly. Coupled with the Goods and Services Tax (GST) hike in July as well, the Nets fee increase could not have come at a worse time.
We are constantly told that the economy is booming and the salaries of most employees have risen, and hence, we should bear with the price increases.
The reality is that many mid-level income workers have yet to see a substantial salary increase but keep forking out more for basic necessities, utilities, healthcare and transportation.
Although Case has called the Nets fee increase "a great disservice", in reality, Nets does not have to back down from its stance. Its explanation of rising competition from debit cards does not ring true to me. I believe most Singaporeans would rather use Nets for its convenience and the fact that they do not have to pay to use it.
Knowing that the goods they buy now may cost more as a result of using this service, many consumers may choose to revert to cash. All along, I have been under the impression that the Nets concept was a way for Singapore to go cashless and to rely on the electronic transfer of money.
The recent move by Nets to increase its fees for retailers, who in turn could pass this cost increase down to the consumer, is outrageous.
Nets is a small convenience enjoyed by people who cannot afford credit cards. Debit cards are commonplace but more suited for people who travel. Also, debit card transactions take a few days to clear, and not many retailers, such as mini-marts and hair salons, have debit card facilities.
Nets' chief executive officer Poh Mui Hoon is not entirely incorrect when she emphasised that the hike in fees for retailers is "not a consumer issue in any way and should not be made out in any way to be one".
However, it cannot be denied that the consumer will ultimately suffer the collateral damage of that hike. Case, therefore, has a duty to look out for the consumer.
In any retail price increase, retailers will almost always pass down the cost, either in price hikes or reduced quantities. Businessmen will be businessmen. If their costs increase, they will find ways and means to compensate for that increase; they are not exactly philanthropists when it comes to business.
Nets is a secure way of payment in lieu of cash and should be encouraged; you need both the merchants and the consumers to make cashless payment a way of life. Any move by Nets to hinder this must be resisted. If the reasons for the hike are justifiable because of their higher operating costs that would lead to a loss, then increase the levy by all means. But it should not be an opportunity for higher dividends for shareholders. -
June 6, 2007
Case slams shoe store that charged Nets levy
Parkway Parade shop made customers pay extra although practice is disallowed
By Lim Wei Chean
A PARKWAY Parade shoe seller has been found to be profiteering by charging a levy for Nets purchases ahead of a rise in the fee levied on retailers.
Under their agreement with Nets, retailers cannot pass on this fee to consumers.
The fee hike - to take place over three batches, will see merchants paying transaction fees of up to 1.9 per cent of purchases, up from the current 0.35 to 0.55 per cent - will start on July 1.
Consumer watchdog Case and Nets have condemned the merchant's move.
Since April 1, Dynasty Shoes in Parkway Parade has been charging customers who pay by Nets an extra 1.7 per cent on purchases.
Yesterday, The Straits Times went there and paid $1.15 extra - via Nets - for a $69.90 pair of sandals.
When asked about the extra charge, a shop assistant, who wanted to be known only as Nelly, said customers can opt to pay cash and avoid paying the fee.
She then produced a letter from Nets dated last December stating that Nets will be levying a transaction fee of 1.7 per cent of purchases from the shop.
The letter indicated the hike will start on April 1. It did not say that consumers will have to bear the increase.
Nets later changed the implementation date to July 1.
But Mr Patrick B.W., who runs Dynasty Shoes, claimed he did not receive a second letter from Nets that the implementation had been delayed. He also said he did not get a reply to a letter he sent to Nets informing it that he will pass on the charge to consumers if the hike is carried out.
He said: 'We never agreed not to pass the fee to consumers.'
Nets - owned by a consortium of local banks DBS, UOB and OCBC - is a popular cashless payment system with six million users.
Some 13,000 retailers are on it. Many small-scale retailers, in fact, depend on Nets, as they cannot afford the fees levied by credit card issuers.
Yesterday, Case's vice-president, Mr Lim Biow Chuan, referring to the Parkway Parade shop, said: 'Such business conduct is unacceptable.' Case also hit out at Nets earlier, saying its move to raise fees is a 'monopolistic practice'.
Nets chief executive officer Poh Mui Hoon said consumers should call the Nets hotline on 6274-1212 to report any errant merchant.
Yesterday, Ms Poh also responded to Case's criticism. She said: 'This is not a consumer issue since merchants are not allowed to pass on the charges to consumers.'
She insisted that Nets has 'no choice' but to increase fees to ensure that banks will continue to issue Nets-linked cards in the face of competition from bank-issued debit cards, which number about 600,000 in Singapore.
But Case filed a complaint with the Competition Commission of Singapore (CCS) against Nets yesterday.
A CCS spokesman said a fine not exceeding 10 per cent of the business turnover may be imposed for up to three years if CCS 'deems an infringement was committed'. -
They can say that only retailers are affected
Let's put it this way... All these are practically hidden cost to running a biz, so it eventually affects how much the retailers mark up their items for sales price...
I think let the retailers and consumer have the final laugh -
anyone knows what is the overall effective tax rate in Singapore for an individual?
Consumption tax : GST 7%, nets 1.8% (assume all absorbed by consumers) = 9.8%
Transportation tax: For private car owners : Road tax, road usage tax, car import tax, COE. Public transportation fare increase.
Housing tax: Property tax.
Tax on Earnings : Personal income tax.
A big chunk goes to CPF and after paying taxes, it is not surprising that the disposable income of one commoner is low.
For the retailers, a new rental structure will be on its way. A minimum annual rental of 20K plus 8% of revenue. So most likely retailers will find it tougher to survive in business because 8% of revenue tax will increase proportionately as his business expands. -
No wonder cannot tahan.Originally posted by CannotTahan:anyone knows what is the overall effective tax rate in Singapore for an individual?
Consumption tax : GST 7%, nets 1.8% (assume all absorbed by consumers) = 9.8%
Transportation tax: For private car owners : Road tax, road usage tax, car import tax, COE. Public transportation fare increase.
Housing tax: Property tax.
Tax on Earnings : Personal income tax.
A big chunk goes to CPF and after paying taxes, it is not surprising that the disposable income of one commoner is low.
For the retailers, a new rental structure will be on its way. A minimum annual rental of 20K plus 8% of revenue. So most likely retailers will find it tougher to survive in business because 8% of revenue tax will increase proportionately as his business expands.
Really, it makes us wonder if we would be better off without CPF or if it were an opt-out scheme. But why isn't it so? Because it had been mentioned before that the CPF is a inflation regulation tool in disguise as well.
And, "if at the age of 55, your total CPF money is less than the then-prevailing Minimum Sum, then you get to withdraw nothing at all. Another reason to keep working."
http://mrwangsaysso.blogspot.com/2007/05/quick-note-about-cpf-and-retirement.html
And now, who says the lowest-income group does not pay tax? -
study carefully Singapore laws particularly tax related topics. Maybe you can figure out what you and me should act in order to do well. A new breed of commoner Singaporeans is forming and evolving under these policies. Might be a stronger breed than before. maybe this is our government's intention and what they wish to see. although they cannot openly say it out.