Heads you pay us, tails you send customers to us

We’ve seen it before, for example when Ebay used its dominant position in the online auction sector to gain an advantage against competitors in the money transfer business by forcing customers where it has an effective monopoly to use its product (its PayPay “PayPal” system) instead of a competitor’s where it doesn’t. Using a dominant position in one industry to undermine competition in another.

And here it is again. The nearly monopoly electronic payment system for purchasing goods with a customer’s own money in shops in Australia – EFTPOS – is now gouging its retail customers with extra fees. How is that similar? Because EFTPOS is controlled by, along with some big banks and insurers, Coles (Wesfarmers) and Woolworths. So those two enormous supermarket chains can absorb these fees easily – a good portion of them are just going back to themselves anyway – where their competitors, like independent grocers, are left struggling with another cost they have to pay or lose customers. Heads you pay us, tails you send customers to us.

But, hey, I’m sure this will all work out for consumers in the long run, somehow. Go free market! Go!

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7 responses to “Heads you pay us, tails you send customers to us

  1. Grr there is nothing so annoying as encouraging consumers to rely on a particular model of transaction because it is free and then adding a cost to it. Woolworths is doubly pissing me off at the moment because they have made the executive decision that they will not accept payment by VISA or Mastercard debit cards. I am waiting for them to come out and say “we don’t accept cash anymore”.

  2. I’ve always thought they should get a comma in there: “Pay, Pal”.

  3. jordanrastrick

    Woolworths is doubly pissing me off at the moment because they have made the executive decision that they will not accept payment by VISA or Mastercard debit cards.

    Wait, which Woolworths is this?

    The ones I shop at accept by Visa Debit without any complaint.

  4. jordanrastrick

    Grrr, typo. “by” -> “my”

  5. Jordan, Woolworths (and related business like BWS) will accept debit cards, but they won’t allow you to use the credit option, only savings or cheque. This could be because they have to cover the VISA and Mastercard fees instead of adding them to the customer’s bill, and by forcing you to use credit/cheque they get to keep that money instead.

    Also, some banks (like mine, Suncorp) have zero fees when debit cards are used with the credit option but not the standard account options. There’s a lot of people out there who might be forced to pay some extra bank fees thanks to Woolworths’ policy.

  6. Splatterbottom

    “Go free market! Go!”

    A market dominated by a few major players is not a free market. It is an oliogopoly – an invitation to extortion rape and pillage consumers by the participants. Anti-competitive behaviour should be criminalised.

  7. narcoticmusing

    A good point SB – it reminds me of the anti-trust issues in the early 20th century in the US

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