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SINGAPORE: It may not seem, at first, to affect your pocket directly.
But when the Network of Electronic Transfers (Nets) raises its levy on businesses offering it as a mode of payment, the increased burden on retailers could lead to higher prices for consumers, warned the Consumers Association of Singapore (Case).
At a press conference yesterday, Case president Yeo Guat Kwang minced no words in calling the three- to four-fold increase by Nets “unacceptable” and “monopolistic”.
The watchdog is even considering the possibility of bringing the matter up to the Competition Commission Singapore, the statutory board monitoring fair competition here.
“About 80 per cent of HDB retail outlets accept Nets and no other debit cards or credit cards,” said Mr Yeo. “Even government agencies accept Nets as a mode of payment.”
He added: “They have been given this monopolistic mode of operation because we see this as a basic infrastructure, to provide a basic mode of payment for all Singaporeans. So, they can’t just come out and tell Singaporeans now ‘I see this as ... a commercial decision’.”
Nets chief executive officer Poh Mui Hoon said Nets needed to respond effectively to competition, by paying the interchange fee card-issuers expect from facilities like Nets.
Elsewhere in the world, domestic debit networks similar to Nets have been overtaken by international debit networks offering higher returns to card-issuers, Ms Poh added.
But Mr Yeo disagreed with the justifications. “They should consider other cost-saving methods (rather than increase the levy),” he pointed out. “And what happens when other debit and credit cards adjust their fees upward? Will Nets do the same?”
And it is not as if retailers can simply stop offering Nets as a mode of payment, even if they want to.
“If most of our customers usually pay through Nets, we have to continue,” said Mr Lawrence Liow, president of the Association of Small and Medium Enterprises. “Then it becomes a matter of who will ultimately bear the cost.”
While retailers are not allowed to transfer the extra fee directly to consumers under the Nets service agreement, Case vice-president Lim Biow Chuan pointed out the cost could be passed on in many ways. “It doesn't look like it will affect us but ultimately it will,” he said. “Retailers can also tell customers to pay by cash, or pay more to use Nets.”
When contacted, the Singapore Chinese Chamber of Commerce and Industry — which had initiated a dialogue with Nets over the increase in February — said both sides were still in negotiations.
To help retailers adjust, Nets will implement the hike in stages, and offer SMEs rebates of up to 25 per cent on the new levy from July to the year’s end.
Promotions and discounts will help to draw more Nets users. - TODAY/fa
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