Mediawatch: The politics of PayWave
123RF
"Can someone get the Beehive a press secretary who can understand a news cycle?" asked the host of
Herald Now
show Ryan Bridge, opening his show last Tuesday with a bit of a broadside at the government's political management.
"Yesterday we had a 10-minute sermon - that's the opposition's words - from Nicola Willis and Christopher Luxon about the cost of living crisis," he said, referring to
Monday's post-Cabinet press conference
.
That was timed for the first anniversary of their tax cuts - so why was that timing so bad?
Bridge flourished
The Herald
's own front page that day with a scoop about big boosts to the fees that Crown bodies can pay board members.
"It's probably the worst headline you could have at a time like this," he spluttered. "Now I'm not saying they don't deserve it, but the timing... come on!"
In bad economic times, stuff that looks bad can end up looking a lot worse no matter what day it goes public. The lead story on
Herald Now
that day also looked like it was timed with optics in mind - banning surcharges on in-store contactless transactions.
"Those pesky surcharges on card payments are gone-skis," Bridge declared, echoing the government's own announcement.
"Most customers will be very happy to see an end to the horrible little curled up handwritten coffee stain stickers on the EFTPOS machine," Consumer Affairs Minister Scott Simpson told Ryan Bridge.
But Bridge was not distracted by the aesthetics of EFTPOS terminals. He wanted to know who would really reap the benefit of the estimated $150 million saved from the surcharges salami-sliced out at stores as things stand.
"That will be absorbed into the retail system," the minister said.
"Right. Higher prices, in other words?" Bridge asked.
"It's not much over the entire New Zealand commercial marketplace," the minister countered.
But if so, it would not really cut the cost of living very much at all - and was not really a strong lead story at a time with so much else going on.
"We can only pray that Luxon and Willis understand that shifting $90 million from banks to consumers is irrelevant in the context of a $430 billion economy, including the $7.2 billion the banks made in profits last year," columnist Matthew Hooton
said
in
The Herald
on Friday.
Consumer NZ was not stoked that credit card surcharges applied to online payments were not covered by the ban.
"This is disappointing because your flight or accommodation booking or any other online purchases could still attract a surcharge," Consumer NZ said.
"Those transactions are generally much more expensive to process because... they have to protect against online scams, online fraud," Nicola Willis told RNZ's
First Up
.
"We've kept them out of the regime for now because part-passing on the charge to the consumer makes more sense there," she added.
But banks also deal with that and their charges are regulated - and it is far from transparent now how those costs are covered for online credit card transactions.
While the Prime Minister had said on Monday: "You will no longer be penalised for your choice of payment method," media scrutiny this week revealed that users of EFTPOS and cash payers might end up penalised by a ban.
"Any transaction where someone pays by swiping or inserting, is free for a retailer. But as people move to contactless... a higher percentage of their transactions will incur a fee," Retail NZ's Carolyn Young
told RNZ
's
Morning Report
.
The Commerce Commission recently moved to cap the interchange fees banks charge each other. That was also meant to reduce the cost to retailers. More people now using PayWave could wipe out the other potential benefits.
"I think it's really just performative. If we're paywaving everywhere and then the costs are shared across everyone," Dan Brunskill of Interest.co.nz
told RNZ
's
Nine to Noon
on Tuesday when asked about the PayWave surcharge ban.
The same day BusinessDesk pointed out that just 10 days earlier the Commerce Commission had claimed its interchange fee cap would save businesses $90 million a year in payment costs.
The Commission [https://comcom.govt.nz/regulated-industries/retail-payment-system/media-releases/comcom-saves-businesses-$90-million-a-year-in-payment-costs#:~:text=The%20Commerce%20Commission%20has%20today%20issued%20its,businesses%20to%20accept%20Visa%20and%20Mastercard%20payments] also said it was already exploring what regulation may be needed to address excessive surcharging, which it estimated at about $45 million to $60 million a year.
But Business Desk's headline
Government beats Commerce Commission to card surcharge ban
showed that in this case, the government might have got its PR timing right to take the credit for reduced credit card payment costs now.
The media scrutiny also illuminated another duopolistic aspect of our economy: Visa and MasterCard dominating this payment trade.
Alternatives do exist, BusinessDesk tech reporter Peter Griffin
pointed out on Wednesday
.
But he said after the surcharge ban, PayWavers here will be less likely to seek out cheaper solutions if they cannot see they are cheaper.
"We should now focus on reducing the underlying costs of payment processing, not simply regulating away the only mechanism for acknowledging those costs. In the world of payments, as in so much else, what's visible on the bill is only the start of the story."
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