Fight competition the SG way - raise prices!
themediaslut may not be the brightest economic student in town, but the shop that gives her the best value for her dollar gets her business.
themediaslut finds it strange that a spokesperson for NETS , a cashless transaction service, used price increase as a weapon to fight competitors. Isn’t that a little queer?
From The New Paper (22 May 2007);
Mr Ivan Ong, vice-president of Nets Payment and Value-added Services, explained the fee increase was needed to help Nets face increasing competition from international card schemes, adding that Nets transactions fees are still the lowest in the market.
A quick backgrounder for themediaslut’s non-Singapore readers, Nets (Network for Electronic Transfer) is a system for Singaporeans to pay for stuff at shops with their bank ATM cards.
Nets is used by many neighbourhood stalls that cannot afford to make use of Visa and Mastercard services.
Nets is planning to raise the fee of using the system from 0.35 and 0.55 per cent of each transaction to 1.5 and 1.8 percent of purchases from July 1, 2007.
This means that the shop owners have to pay more to use the system and they are also not allowed to pass on this fee to their consumers.
Back to the statement.
If Nets is facing increasing competition from international card schemes, why are they increasing the transaction fee instead of reducing it? Is the new theory of Singapore economics?
Also, who and what are these international card schemes that is being offered to the Singapore neighbourhood shops that threaten to compete with Nets?
themediaslut doesn’t think these shop owners are looking at an international bank in the US to install a payment system for them.
Hence, the justification for the transaction fee does not make any sense for themediaslut.
themediaslut is usually pro-consumer, but in this case here, she would try her best not to use Nets system from July 1 onwards.
As they say, cash is king!
I agree. NETS don’t really know what they are doing - but i guess they can get away with this cos they have a virtual monopoly on Point of Sales payment.
I wish MasterCard will come into the market - cos their tap and pay system looks way more cool. But i guess Singapore is too small a market for them to even bother about us. Then again, they did implement something in HK - so why not Singapore. Must be our government regulations again. *sigh*
What the hell is EZ-Link doing anyway? Our EZ-Link cards are already equipped to make cash-less payment. McDonalds & 7-Elevan are using it now. Heck, if EZ-Link does this, they’ll be even more successful than NETS.
Just my 2 cents.
Thanks for your 2 cents Miccheng.
themediaslut wants to add a few more cents.
The biggest advantage of NETS is that the system is directly linked to your bank account.
Once the consumer applies for the ATM card from a local bank, it ready becomes a NETs card. No need for any more applications form.
Also, to use the card, the consumer needs to enter a 5-6 digit password before the consumer use the card.
This is the security feature that lots of Singaporean rely on.
If they lose the ATM card, no have to worry, just call bank and disable the card.
Even if not disable in time, at least the finder will have to think of the pin number. Unless the pin number is written some where on the card.
The EZ-Link card however does not have that security feature hence the take up rate to use it for other payment isn’t as high as NETS.
Imagine the consumer loses the EZ-Link card and has SGD50 value in it, the consumer loses the SGD50.
Because no password is needed on the card, the finder can use the SGD50 for anything.
Hence, many Singaporeans don’t like to add large amounts, say more than SGD100, into their EZ-Link card and themediaslut believes most Singaporeans use the NETs to make payments of that amount so they don’t have to withdraw cash.