Ed Nilson. Manager Banking Systems. SHOPRITE CHECKERS. Shoprite Checkers. Submission to the Competitions Control Board in respect of the Feasibility Report on charges in the Banking Industry. NUMBERS…. 9,000 checkouts. R32 BILLION Sales. 44 million card transactions per annum.
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Debit card transaction is PIN based, on line, guaranteed, pre funded, minimum fraud element.
No justification for an ad valorum fee on debit.
Customer pays, merchant pays.
Fee is based on old thinking, equated to charging an ad valorum on credit. Previously, merchants were paid by the banks.
Fee should be based on transaction processing cost.
e.g. Australia is 6 cents.
Small merchants are in some cases charged the same rates for debit and credit transactions.Debit card Merchant Fees
Banks have bi laterals for the processing of some card transactions. Details not made public.
E.g. Amex, Diners and buy aid cards.
Some cardholders are charged 2 fees on a single transaction where goods and cash are involved. But only one slip is signed for. They perceive the retailer to be the recipient of the fees.
For franchised ATM services, cardholders are charged an additional fee over and above the normal costs.Double or hidden costs
Shoprite spent millions on becoming EMV (Chip) compliant. transactions. Details not made public.
No benefit to the merchant.
No contribution from the banks. U.K. banks assisted merchants.
No reduction in merchant fees, although the fraud element is supposed to reduce dramatically.
Initiative driven by Master Card and Visa.Experience
F i n i s transactions. Details not made public.