Lower Bank interchange fees to 'enhance' credit card earn rates

[PLANT]

I see the Amex essentials card applications soaring!

 

[albyd]

Re: Interchange regulation will lower Visa and MasterCard Points Earn in 2016

This why I'm torn on the issue. I know the higher interchange fees from a few years back were paying for my points.

The question is does lowering the interchange fee have any benefits?

I suppose it dose in that allowing surcharges for AMEX means businesses don't have to inflate their overall pricing to account for the higher costs of accepting amex.

Views on credit cards are "strange"in australia. Was shocked that a friend from singapore a couple of weeks ago gave me a cats bum face when i said why don't you just use your credit card instead of getting cash out and paying the ATM fee. He didn't want a CC. Friends in Thailand have similar views, with a lot prefering to pay cash that via credit, or even using a debit credit card.

The knowledge the way tings are going is fairer doesn't make me not look longingly at the USA and how easy it is to earn points there

I suspect that the existence of reward points have changed our culture such that we naturally want to pay for everything on our CC's as we chase points and this has hastened the move towards a cashless economy for Australia.

Will cutting interchange result in savings for merchants and will they pass it on in the form of lower prices (as the RBA thinks)? Will these fine businesses pocket the saving or pass it onto us in lieu of our points? I think it's unlikely they will pass it on but time will tell.

I think Amex (and Diners) are the only games left in town. I hope Westpac (as recently speculated) doesn't start issuing Amex cards directly through Amex to circumvent the latest cuts. Otherwise, RBA will likely not 'forget' Amex direct cards at its next review. May keep the game alive for a little longer assuming merchants don't surcharge Amex given it will be much cheaper to accept MC/Visa (Super Premium cards which many of us have, won't be quite as costly to accept as they are now). Maybe the expected surge in Amex direct applications will result in pressure not to surcharge Amex.

Just a matter of making the most of the next few months, then seeing what happens and take it a day at a time.

 

[moa999]

Re: Interchange regulation will lower Visa and MasterCard Points Earn in 2016

Will cutting interchange result in savings for merchants and will they pass it on in the form of lower prices (as the RBA thinks)? Will these fine businesses pocket the saving or pass it onto us in lieu of our points? I think it's unlikely they will pass it on but time will tell.

Suspect they'll be forced to in many instances by the Amazon juggernaut.
Sorry Gerry

 

[Jeffrey O'Neill]

Re: Interchange regulation will lower Visa and MasterCard Points Earn in 2016

Will cutting interchange result in savings for merchants and will they pass it on in the form of lower prices (as the RBA thinks)? Will these fine businesses pocket the saving or pass it onto us in lieu of our points? I think it's unlikely they will pass it on but time will tell.

It's funny. When you invest in a company you want the biggest profit and highest rate of return on your investment.

But then we'll be grumpy if those same companies pocket any increase in revenue from lowered interchange fees.

Human nature is fickle

 

[TRS-80]

Re: Interchange regulation will lower Visa and MasterCard Points Earn in 2016

To some extent I doubt the RBA cares whether the money saved on interchange fees goes to the consumer or the merchant, just so long as it's not going to the issuer and acquirer. That way the money stays in the economy rather than going to the ogilopolist rentiers.

 

[hossein_au]

Re: Interchange regulation will lower Visa and MasterCard Points Earn in 2016

It's funny. When you invest in a company you want the biggest profit and highest rate of return on your investment.

But then we'll be grumpy if those same companies pocket any increase in revenue from lowered interchange fees.

Human nature is fickle

If I "invest" I'm my business, I naturally want to maximise the return on *my* investment. There is nothing wrong with that.

BUT, there is something wrong if/when businesses, with zero investment on their part, get a windfall due to a regulation that is intended to reduce the cost of transactions and is based on the premise that the end users would benefit.

Of course, it is native to presume businesses implement regulations based on their 'intent'. That is why designing effective and efficient regulations is hard, and that is why I think the recent interchange regulation was just a half-baked, knee-jerk, reaction.

 

[SOPOOR]

apologies if its been answered before, i value qantas and velocity points roughly the same for flights, give or take 10-20%,

it seems that all the bank issued amex which have linked to qantas program are now down to 0.5-1 points per dollar
I can earn 1-3 ppd with direct amex via velocity

that means that to earn 1 qff point is now twice or 3 times as expensive, thus making my qantas points essentially worht a lot less,

I know there is a direct amex that you can transfer into qff but that has a high fee

am I on the right track?

it now seems that the entire qff program is now far worse off compared to velocity and other programs unless you have a qantas credit card that earns 1.5 and above ppd

 

[andye]

apologies if its been answered before, i value qantas and velocity points roughly the same for flights, give or take 10-20%,

it seems that all the bank issued amex which have linked to qantas program are now down to 0.5-1 points per dollar
I can earn 1-3 ppd with direct amex via velocity

that means that to earn 1 qff point is now twice or 3 times as expensive, thus making my qantas points essentially worht a lot less,

I know there is a direct amex that you can transfer into qff but that has a high fee

I tend to agree. However people who fly QF a lot may find it worthwhile to add to the one balance. There was also a time when the best ATO-earners were Qantas cards
Personally I'd send my Amex points to CX SQ or SPG rather than either VA or QF

 

[SOPOOR]

I tend to agree. However people who fly QF a lot may find it worthwhile to add to the one balance. There was also a time when the best ATO-earners were Qantas cards
Personally I'd send my Amex points to CX SQ or SPG rather than either VA or QF

thank you, i need to investigate the CX, SQ and SPG programs, as I know nothing about them

do you still think they are better even with 15% bonus transfers?

 

[andye]

thank you, i need to investigate the CX, SQ and SPG programs, as I know nothing about them

do you still think they are better even with 15% bonus transfers?

I do. My feelings which are based on my redemption patterns: SQ at least 1.3 xVA. Personally find CX about same as SQ. SPG about 3x VA/QF (but only 0.5 SPG /Amex MR) as can transfer to AA and Alaska

 

[theevilmuppet]

apologies if its been answered before, i value qantas and velocity points roughly the same for flights, give or take 10-20%,

it seems that all the bank issued amex which have linked to qantas program are now down to 0.5-1 points per dollar
I can earn 1-3 ppd with direct amex via velocity

that means that to earn 1 qff point is now twice or 3 times as expensive, thus making my qantas points essentially worht a lot less,

I know there is a direct amex that you can transfer into qff but that has a high fee

am I on the right track?

it now seems that the entire qff program is now far worse off compared to velocity and other programs unless you have a qantas credit card that earns 1.5 and above ppd

The price of Qantas Frequent Flyer points hasn't changed. The ability of card issuers to provide as many per dollar of spend has thanks to the idiots at the RBA.

The QFF and Velocity programs haven't changed. The issue here is an ideological set of moves made against the recommendations of many, with the intent of protecting EFTPOS and the upcoming New Payments Platform initiative.

The CEO of Velocity made a very telling statement quite a while ago, stating that the direct earn model was going to die and this is precisely the reason why. The efforts by QFF and Velocity to provide alternative earn opportunities are at least partially in response to these poorly justified developments.

 

[SOPOOR]

The price of Qantas Frequent Flyer points hasn't changed. The ability of card issuers to provide as many per dollar of spend has thanks to the idiots at the RBA.

The QFF and Velocity programs haven't changed. The issue here is an ideological set of moves made against the recommendations of many, with the intent of protecting EFTPOS and the upcoming New Payments Platform initiative.

The CEO of Velocity made a very telling statement quite a while ago, stating that the direct earn model was going to die and this is precisely the reason why. The efforts by QFF and Velocity to provide alternative earn opportunities are at least partially in response to these poorly justified developments.

Yes very true. I assume that even though the program hasn't changed.if the methods of avenues of getting qantas points has severely diminished . People will stop using it.

Since direct Amex hasn't been affected. And now that the banks are now reducing or ditching the Amex cards. That means less profit for Amex as well. I wonder if Amex start reducing their offering for direct card users to increase their profits.


Will 3 ppd for some cards be reduced to 2?

I fear a devastating announcement will come and the days of collecting points and getting awesome flight deals will come to an end

 

[albyd]

It looks like Amex are making some changes at the margins like simplifying points earn from 3-2-1 for QFF and Velocity cards to 1.5 across the board. May end up standardizing Platinum Charge to 1.5.
With Citi Devaluing Diners earn and redemption rates, can't rule out Amex making some adverse changes. They may wait until the new regime and some of the following they've picked up through Bank issued Amex cards (esp ANZ) switched to direct before they make any changes.
Focus will increasingly shift to acceptance. If merchant fees have to give in that scenario, then points will cop it.
I for one am happy with current level of acceptance. Can live with pulling another card out given most of my spend goes through Amex.

 

[Cruiser Elite]

I for one am happy with current level of acceptance. Can love with pulling another card out given most of my spend goes through Amex.

Interesting comments alby - what level of Merch Fee are you comfortable with?

 

[albyd]

CE there's the rub in all this.
As a customer, I'm not paying a surcharge for most of my points (especially with larger businesses that don't pass it on) but there is an increasing number of retailers who are surcharging and I don't think that's going away. I was recently quoted 4% for child care fees - paid by Explorer on reward pay effectively 1.3c/point. That's about as much as I'm prepared to pay as I value MR more highly.
Ultimately, surcharging can go away but Amex would need to reduce merchant fees which would destroy the funding model for points and therefore our points earn. That's why I'm prepared to live with the current system as it is but something may have to give if Amex wants 100% acceptance.

 

[burmans]

I do. My feelings which are based on my redemption patterns: SQ at least 1.3 xVA. Personally find CX about same as SQ. SPG about 3x VA/QF (but only 0.5 SPG /Amex MR) as can transfer to AA and Alaska

very much the program's I rate too. SPG to AA/Alaska you should in general wait for bonus offer which happen occasionally and SPG to Marriott to UA can also be useful when they have a bonus. You can warehouse in MR/SPG while you wait for the best opportunities!

 

[Cruiser Elite]

Anybody here with exp paying Invoices generated via Xero? I came across a 2.7% surcharge on a Xero Invoice this arvo - is this std does anybody know?

 

[Comoman]

Anybody here with exp paying Invoices generated via Xero? I came across a 2.7% surcharge on a Xero Invoice this arvo - is this std does anybody know?

Yes we use Xero. The built in credit card facility is from Stripe - they charge 2.7% across all cards. Obviously MC/Visa users get shafted.

They're going to have to reduce this post 1st July.

 

[Cruiser Elite]

Anybody here with exp paying Invoices generated via Xero? I came across a 2.7% surcharge on a Xero Invoice this arvo - is this std does anybody know?

Not personal Comoman - but aimed squarely at Xero this is bloody criminal - how does any business operator sleep nights shafting customers to that extent? I am truly staggered.

 

[cove]

I think AfterPay might be 6% upwards.
Our Amex offer is 1.5% from them to us. I think it may be starting on July 1st.