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As someone else from NZ I would like to second this. We got a US bank account for our company and I was surprised how archaic the US banking industry is. Anoth

As someone else from NZ I would like to second this. We got a US bank account for our company and I was surprised how archaic the US banking industry is. Another thing very interesting in NZ/AU is EFTPOS. EFTPOS is like the credit card system only with no transaction costs. Any shop in NZ/AU will take it. The original business model for EFTPOS was that the user pays a fixed charge per transaction. I think it was something like 20c originally. However, because each bank was free to charge it's customers whatever it pleased for EFTPOS, price competition very quickly reduced that cost to zero (Which to be fair is what the actual cost of a purely electronic transaction should be). There is no reason not to pay for even the most trivial purchase with EFTPOS so I haven't carried cash around in my entire life. The only reason everyone still uses credit cards as well is for online purchases. EFTPOS is in person only. The number on the front of the card has no ability to be used for making a payment. I think the place where VISA is starting to get more inroads into the NZ market is with NFC. NFC is getting more prevalent, and we are also starting to see things like this turn up as well: https://www.asb.co.nz/paytag/ https://www.asb.co.nz/paytag/

jpmattia 12y ago
> EFTPOS is like the credit card system only with no transaction costs. Somebody is picking up the tab. Is it the merchants? or the banks? gov't (=taxes)?
- hdevalence 12y ago
  Your question was answered in the parent comment: the users paid, and competition drove the fees to zero, i.e., the costs are now paid by the banks.
- Negitivefrags 12y ago
  The merchant has to buy (or rent) an EFTPOS terminal. The bank also charges the merchant a setup fee to connect your terminal to your bank account. Once that has been done there are no more fees. You have to look at the way it evolved. Because this is a service offered to customers by each bank in competition with each other, the competition drove the price per transaction to zero.
  - jpmattia 12y ago
    > the competition drove the price per transaction to zero. So the customers are paying. The banks just build it into the banking fees. It's not like that infrastructure is free.
    - aragot 12y ago
      > so the customers are paying. Yeah. Kindof. NAB has the debit card account free of charge, unlimited ATM withdrawals, transfers across banks free and attractive savings rates. CBA's fee is $5/mo unless you get a salary per month through your account. Pretty much the same for the 4 major banks. In France you need to pay 60-120€/year for an account + CC. In Australia you don't need to pay. In US don't they beg you to open a credit card?
      - jpmattia 12y ago
        > In US don't they beg you to open a credit card? Yeah, pretty much. If you are responsible, you get back 1% of all of your purchases on the CC. And in the spirit of "who pays for that", it's the folks carrying a balance who pay for the 1% cash back on everything.
        dsjoerg 12y ago
        Another group of folks who pay for the 1% cash back are the merchants who pay fees well over 1% for transaction processing. http://www.cardfellow.com/blog/credit-card-processing-fees/ http://www.cardfellow.com/blog/credit-card-processing-fees/
        mgkimsal 12y ago
        it's not the people carrying a balance that pay for that - it's the merchants. it's an extra fee added on to the credit card fee that a merchant can't predict nor can they avoid. As a merchant, I charged people, say... $10 for something. The fee might be 2.9%, but if it was 'rewards card' (which I can't tell ahead of time) the charge would show up as 4%. The cost is passed on to every in the form of higher prices. The people carrying a balance have nothing to do with this. That would simply eat in to the banks' profits. Why would they just randomly give people x% of the profits from balance-accrued interest?
- spacefight 12y ago
  No, in some countries there are transaction costs for EFTPOS, but it's very low compared what is being charged for credit card transactions.
Aeoxic 12y ago
> There is no reason not to pay for even the most trivial purchase with EFTPOS so I haven't carried cash around in my entire life. Unfortunately, there is a reason to still carry some cash in Australia: EFTPOS minimums. Airport stores are notorious for this, but it's quite widespread. "Oh sorry, we have a $10 minimum on EFTPOS." "... You're a coffee shop." This stemmed from the fixed price per charge being charged to the merchants. The less you pay, the higher percentage that charge is of the total bill you're paying, resulting in them making slightly less profit. In reality, those charges have been abolished by almost all, if not all, banks in Australia. It's now just a game of trying to make you buy $7 worth of miscellaneous stuff for your coffee. No thanks, I'll go elsewhere.
- Negitivefrags 12y ago
  Right, I suspect that the difference is that there never were any charges per transaction to the merchant in NZ. I've never seen a shop that had a minimum size for an EFTPOS transaction here. On the other hand there are a lot of shops that either have a minimum transaction size, or a surcharge, on Credit Card transactions.
  - Aeoxic 12y ago
    First you guys make us look like idiots with our Internet capability, and now with the transaction charges. Slow down a bit and let us catch up, yeah? > On the other hand there are a lot of shops that either have a minimum transaction size, or a surcharge, on Credit Card transactions. That also happens here in Australia. I'm fairly sure that's common worldwide.
- elithrar 12y ago
  > Oh sorry, we have a $10 minimum on EFTPOS." > "... You're a coffee shop." I always just ask them to charge me a surcharge instead. Some places "get it", but a few have stared at me blankly. I don't want to a) walk back down the street to an ATM or b) buy a bunch of pastries that I don't want to eat just to pad out my bill. But otherwise, AU/NZ's EFTPOS system is generally fantastic, although being replaced (anecdotally) by the credit card system since PayPass/PayWave were deployed so quickly here.
tomp 12y ago
> Which to be fair is what the actual cost of a purely electronic transaction should be). When you pay with PayPal/Visa/MasterCard, you're not paying for the electricity or the transaction, you're paying for fraud insurance. I wonder, how does EFTPOS handle fraud, and who's responsible for it?
- jordanthoms 12y ago
  I'm not sure, because I've never had a fraudulent transaction with it and never heard of anyone who has. Probably because it's point of sale, card present only. (Fraud with ATM withdrawals is an issue, but that's the bank's problem).

jpmattia 12y ago

> EFTPOS is like the credit card system only with no transaction costs. Somebody is picking up the tab. Is it the merchants? or the banks? gov't (=taxes)?

hdevalence 12y ago
Your question was answered in the parent comment: the users paid, and competition drove the fees to zero, i.e., the costs are now paid by the banks.
Negitivefrags 12y ago
The merchant has to buy (or rent) an EFTPOS terminal. The bank also charges the merchant a setup fee to connect your terminal to your bank account. Once that has been done there are no more fees. You have to look at the way it evolved. Because this is a service offered to customers by each bank in competition with each other, the competition drove the price per transaction to zero.
- jpmattia 12y ago
  > the competition drove the price per transaction to zero. So the customers are paying. The banks just build it into the banking fees. It's not like that infrastructure is free.
  - aragot 12y ago
    > so the customers are paying. Yeah. Kindof. NAB has the debit card account free of charge, unlimited ATM withdrawals, transfers across banks free and attractive savings rates. CBA's fee is $5/mo unless you get a salary per month through your account. Pretty much the same for the 4 major banks. In France you need to pay 60-120€/year for an account + CC. In Australia you don't need to pay. In US don't they beg you to open a credit card?
    - jpmattia 12y ago
      > In US don't they beg you to open a credit card? Yeah, pretty much. If you are responsible, you get back 1% of all of your purchases on the CC. And in the spirit of "who pays for that", it's the folks carrying a balance who pay for the 1% cash back on everything.
      - dsjoerg 12y ago
        Another group of folks who pay for the 1% cash back are the merchants who pay fees well over 1% for transaction processing. http://www.cardfellow.com/blog/credit-card-processing-fees/ http://www.cardfellow.com/blog/credit-card-processing-fees/
      - mgkimsal 12y ago
        it's not the people carrying a balance that pay for that - it's the merchants. it's an extra fee added on to the credit card fee that a merchant can't predict nor can they avoid. As a merchant, I charged people, say... $10 for something. The fee might be 2.9%, but if it was 'rewards card' (which I can't tell ahead of time) the charge would show up as 4%. The cost is passed on to every in the form of higher prices. The people carrying a balance have nothing to do with this. That would simply eat in to the banks' profits. Why would they just randomly give people x% of the profits from balance-accrued interest?
spacefight 12y ago
No, in some countries there are transaction costs for EFTPOS, but it's very low compared what is being charged for credit card transactions.

Aeoxic 12y ago

> There is no reason not to pay for even the most trivial purchase with EFTPOS so I haven't carried cash around in my entire life. Unfortunately, there is a reason to still carry some cash in Australia: EFTPOS minimums. Airport stores are notorious for this, but it's quite widespread. "Oh sorry, we have a $10 minimum on EFTPOS." "... You're a coffee shop." This stemmed from the fixed price per charge being charged to the merchants. The less you pay, the higher percentage that charge is of the total bill you're paying, resulting in them making slightly less profit. In reality, those charges have been abolished by almost all, if not all, banks in Australia. It's now just a game of trying to make you buy $7 worth of miscellaneous stuff for your coffee. No thanks, I'll go elsewhere.

Negitivefrags 12y ago
Right, I suspect that the difference is that there never were any charges per transaction to the merchant in NZ. I've never seen a shop that had a minimum size for an EFTPOS transaction here. On the other hand there are a lot of shops that either have a minimum transaction size, or a surcharge, on Credit Card transactions.
- Aeoxic 12y ago
  First you guys make us look like idiots with our Internet capability, and now with the transaction charges. Slow down a bit and let us catch up, yeah? > On the other hand there are a lot of shops that either have a minimum transaction size, or a surcharge, on Credit Card transactions. That also happens here in Australia. I'm fairly sure that's common worldwide.
elithrar 12y ago
> Oh sorry, we have a $10 minimum on EFTPOS." > "... You're a coffee shop." I always just ask them to charge me a surcharge instead. Some places "get it", but a few have stared at me blankly. I don't want to a) walk back down the street to an ATM or b) buy a bunch of pastries that I don't want to eat just to pad out my bill. But otherwise, AU/NZ's EFTPOS system is generally fantastic, although being replaced (anecdotally) by the credit card system since PayPass/PayWave were deployed so quickly here.

tomp 12y ago

> Which to be fair is what the actual cost of a purely electronic transaction should be). When you pay with PayPal/Visa/MasterCard, you're not paying for the electricity or the transaction, you're paying for fraud insurance. I wonder, how does EFTPOS handle fraud, and who's responsible for it?

jordanthoms 12y ago
I'm not sure, because I've never had a fraudulent transaction with it and never heard of anyone who has. Probably because it's point of sale, card present only. (Fraud with ATM withdrawals is an issue, but that's the bank's problem).