Credit card companies are cracking down on retailers who have a surcharge for customers who decide to pay with their credit card. Credit card companies take a hefty percentage from each credit card transaction which ends up being paid directly by the retail store. By employing a surcharge, the retailers are trying to pass on the credit card's added cost to the customer.
Credit card companies are offering a service, and of course retail shops can choose whether they want to allow the use of credit cards as a form of payment. However, I believe the card companies are overstepping their boundaries when they require retailers to charge the same amount for both cash and card payments.
The retailers have no choice. They are forced to pay the transaction fee when a customer pays with a credit card. They should have the right to pass that fee to the customer. Customers will either pay the higher price, pay with cash, or purchase their goods from another store that doesn't charge the transaction fee. The credit card company may lose out if the customer decides to pay in cash, but I still think it is unfair for the card company to tell the retailer how to run their business.
The Consumer Council has sided with the card companies on this issue. If that is their policy, I suppose there is nothing that can be done. However, I am disappointed that the Council has sided with big business rather than try and help out Hong Kong's small business owners.
Credit card companies are offering a service, and of course retail shops can choose whether they want to allow the use of credit cards as a form of payment. However, I believe the card companies are overstepping their boundaries when they require retailers to charge the same amount for both cash and card payments.
The retailers have no choice. They are forced to pay the transaction fee when a customer pays with a credit card. They should have the right to pass that fee to the customer. Customers will either pay the higher price, pay with cash, or purchase their goods from another store that doesn't charge the transaction fee. The credit card company may lose out if the customer decides to pay in cash, but I still think it is unfair for the card company to tell the retailer how to run their business.
The Consumer Council has sided with the card companies on this issue. If that is their policy, I suppose there is nothing that can be done. However, I am disappointed that the Council has sided with big business rather than try and help out Hong Kong's small business owners.
4 comments:
Praying that Octopus won't do the same.
The difference between credit cards and the Octopus card, is that the Octopus has become more of a public service tool. Credit cards are still considered a luxury. They are more of a bonus item, while the Octopus has become more of a necessity. We also have to consider who owns the Octopus card to begin with: MTR (and former KCR), Citybus, KMB, Star Ferry, etc. Although they are private companies, they run businesses that are considered to be essential public services.
If the Octopus makes an outrageous move, there will be outcry from the public, and hopefully action from the government.
I know it sounds unfair for the gov't to step in, but you have to expect this kind of intervention when you run this type of business. Credit cards on the other hand are free to do as they please.
What's the surcharge percentage? In Australia it was 3% for Amex and the same for all travel agencies regardless of the card.
I LIke using credit card.
Just Pay off the a HUGE debt the other day.
As A retailer, I love and hate credit card myself. They take Charges from us (about 3~5%)Depending if you are using Visa or American Express. It used to be a lot lower~ And you know the Interests free installments? Well, We are paying for the interests, NOt the card Company ~
BUt it does bring you an easier shopping time.
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