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. They are doing this so as to re-align 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. However there is a concern that this hike will increase the operating costs of merchants , hence consumers will have to bare the addition charges for the system. Along with the implementation of 2% GST and, singapore is likely to face inflations as our prices and wages remains constant. Consumers spending power will be greatly reduced as our wages cannot adjust quick enough. Therefore consumers will choose a decision of what is deemed relevant to them to either sign out of NETS or use cash/credit cards to make payments instead. This decision will be costly to the monopolistic banks because they will loose more than they intend to gain.
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http://sg.news.yahoo.com/070605/5/singapore280223.html
