Odd spot

This I believe has previously flowed through to most people earlier. I was very disappointed that people now seem just to be accepting the EFTpos increases, although because of the way, the banks and the large retailers have it organised, there is little anyone can do. I do not think it is fair, I do not think it is right but .....

Here is the notification

This email is to notify you that our costs have increased for some transactions and decreased for others. We will be passing on these changes as of July 1st 2013.

Here are the changes:

* Eftpos transactions (when the customer presses cheque or savings) of $15 or above will increase by 7 cents.
* There will be two new transaction categories; eftpos less than $15 and MasterCard debit transactions $15 or less, both of which will be offered at a discounted rate. *
* Visa and MasterCard; consumer credit, premium and commercial and international transactions will increase by 0.06% (6 bps).
* All Amex , Diners and JCB transactions will incur a 0.10% (10 bps) charge.
* The 0.15% (15bps) risk premium on transactions not electronically read by the terminal will apply to all Visa and MasterCard transactions.
* The premium and commercial category will include both credit and debit card transactions.
* Eftpos with cash-out and Medicare rebates will remain free.

The background to the eftpos price increases

For some time now, Tyro has been fighting the 10c increase in interchange cost, laid down by eftpos Payments Australia Limited (ePAL). EPAL had originally stipulated the increase be effective from 1st October 2011. Tyro campaigned against this increase in the press, on radio and on TV over 100 times, standing up against what we believe is an unjustified and poorly timed increase. Through our campaign and our rights as a participant in the Australian payments system, we had been able to limit the increase to around half of what we have seen from the major banks. Due to new ePAL interchange rules, which become effective 1st July 2013, Tyro will be hit with the remaining increase.

We hope that the new micropayment categories will encourage you to accept low value EFTPOS transactions in place of cash.

We regret that we have to pass on these fee and cost of business increases. Rest assured, we remain committed to being the voice of small business, pushing back on wholesale fee increases from the big players.

All fees are quoted ex GST

*The reduction in the transaction fee is dependent on your existing rate category. Full details will be available as at 1st July 2013 in your online merchant portal at merchant.tyro.com

Kind Regards
Garry Duursma
V.P. Sales and Marketing
p: 02 8907 1700

Link: http://www.youtube.com/watch?feature=player_embedded&v=yH8Br_f3p9E

Recently, I went to the Card and Payment conference where some of the latest shopping apps in smartphones for business were displayed. This one caught my eye. A similar app to one is going live with epay soon so expect to see more of these.

The company that had it written is a Guatemalan sneaker shop known for being a very cool shop.

When one of their VIP customers enters a competitor sneaker store, this then triggers on the customer's smartphone a special offer for Adidas or Nike of 99% discount at their shop. This discount counts down every second, so it goes 99, 98, 97, 96, 95, etc. The sneaker shopper must run to their shop because their discount is fast disappearing. Each time the discount is claimed, their Facebook status is automatically activated, so their friends know that they brought a bargain Adidas or Nike sneakers. Apparently, over 600 customers were hijacked from their competitors.

Check out how it works in practice.

Stealing customers like this is very clever, but it is not new and we are going to see more of these apps, particularly when the new blue tooth system for smartphones starts rolling out.

I went to a talk by Bruce Mansfield who is the Managing Director of EFTpos Australia who gave a very interesting talk on what he saw as the future of EFTpos. It is now the most popular form of payment in Australia after cash and growing fast.

Afterwards when he asked for questions. So I asked what was the effect of the fees on the EFTpos transactions. After all many of us have seen a dramatic increases in their EFTpos fees recently and I wanted to know his reaction. He did not seem to want to answer that question but he did make some fascinating remarks. One was that many users today of EFTpos do not see it the fees as individually but get charged in bulk. They can do so many transactions and every say month they get charged a fixed amount and the other was that the fees dropped for a while but now they are going up. Hold these thoughts.

Here is the data for EFTpos. The first three columns are from the last three years based on data from the EFTpos Australia site available here.. The average usage is calculated from this, the average fee is what was quoted by Bruce Mansfield in response to my question and the last is a very rough figure from what fees are collected. The last row is the percentage change from 2011 when the fees first came in to last year.

The first point I noticed was not surprising, there is a dramatic increase in EFTpos. This is unusual in a mature product that has been in the market for many years. People using it more (11.3%) and they are buying more in value (8.9%).

Cashouts are going up (6.0%), not surprisingly. It is the cheapest payment method for merchants (our users can get free cashout).

We are all using EFTpos for smaller amounts (-2.5%).

The average fees have gone up considerably (42.9%) and fees collected are up dramatically (59.0%).

I should say here that because of these fees increase we went to Tyro which is what we recommend to our clients.

I am writing this post as a warning to others as I am aware of one such instant that happened just now.

All of us in business do marketing; it is a necessity. As someone said to me, the most recognised company in the world is Coke Cola, although it is well known, it spends a lot of money marketing.

Having said that not all marketing is exactly legit. Unfortunately it is a fact of life that as competition becomes intense, often some non ethnical behaviour can occur.

Some of it falls within the category of “black marketing” like spreading rumours as is well known. There are however, many examples, here are some I have seen, the last actually happened today.

A small stationary company forgot to register their name, immediately another rival company, the local newsagent grabbed the name for his stationery business. The newsagent then started advertising himself as them. This was probably illegal, but the small stationary firm did not have the resources to fight it. A similar situation occurred to another firm that changed its name, after a while trying to save some money; they did not register their old name. Soon they discovered that a rival firm was trading on their name. What can I say? A business spends a lot of money making their name valuable, and a thief stole it.

Similar to this I have also seen company themes stolen. A company calls itself by a generic name. Someone else saids this is my generic name product. It maybe confusing for the customer to know who is what.

Here is another example of “Black marketing” commonly done. Ringing up a rival company pretending to be a potential customer and asking you for product details and references of people that use your product. At the very least they will learn much about you.

Another example I will give you is a rival company offers to buy your business. If you bite they can tell everyone that you are thinking of selling. Among people thinking of buying your products in the long term, this will be a serious concern. It would be a good reason why they should buy from the rival since he will be around. However, this can get better for your rival because as you have bitten, what are you going to tell them? No doubt you will tell them the good points of your business, its strengths, possibly their weaknesses, your plans and opportunities you see that possibly they never even considered. They also will pick up much on the financial side of your business. I know one person told me that while he was telling his rival about his business thinking they were interested in buying, the CEO of his rival company was just taking notes in his diary. Pages and pages he was filling out. Needless to say no offer came out of it. Later some of his financials was publicly released to his further embarrassment.

I am sure many of you have heard and experienced other tricks.

What can I say but be careful?