Sunday, July 01, 2007
7% GST, NETS Fee Increase And YOU
So today is the day where we all look up! Up at rising fees and taxes that is.
I went to Guardian to buy some meds and... whaddaya know, I thought I remembered the price of Panadol erroneously. I had thought they cost somewhere in the range of $3.30 for a 30 tabs pack..... now it's $4.30?? That's a 30% increase in price right there! Let's say I have rememebered a wrong figure, but I am sure that Panadols did not use to cost more than $4 (I remember the price started with a 3). So let's assume they used to cost $3.90. 10.25% increase even using $3.90 as baseline! Should have stocked up on stuff before the hikes. Yikes!
I guess what they say is true. Two things in life that cannot be avoided. Death and Taxes. So, there is seriously nothing that can be done with the recent increases.
All I can say is that I will avoid using NETS at all now. I have always been a low frequency user of NETS, but I will now consciously avoid using it.
It will not help me get cheaper prices, as any price increase will be tagged on for every single mode of transaction, but it's just that I'm doing what NETS says. There is competition out there, which is why NETS needs to raise their transactions fees. Therefore, I will help give them a run for their money.
The previous merchant charges that NETS charged merchants range from 0.35% to 0.55%. This is supposed to be increased in stages till 1.5% to 1.8% in September.
Let's take the lower end of the scale here and do some comparisons. Let's assume that all NETS transactions attract a flat 0.35% merchant fee.
Let us further assume that the daily transactions through NETS amounts to 1 million dollars (this is totally untrue, just a number I grabbed for easy calculation).
Pre-hike fees for NETS: 0.35 % of $1000000 = $3500
Post-hike fees for NETS: 1.5% of %1000000 = $15000
This is an increase of $11500 in merchant fees for every million dollars transacted based on the lowest merchant fee rate.
Now, if people were to start boycotting NETS, how large must the boycott be before there is a significant difference?
First, we need to find out under the new charges, how much money is required to be transacted in order to gain the fees.
$3500 / 1.5 * 100 = $233333.34
That's right. Where it used to take one million dollars, it now takes 233 thousand dollars. They can lose $766667 (76.6%) worth of transactions and it won't make a difference for them.
Now it's up to YOU to make sure we give them a run for their money since their reason for the current increase is competition from other cards. *guffaw*
2 Adorations
So today is the day where we all look up! Up at rising fees and taxes that is.
I went to Guardian to buy some meds and... whaddaya know, I thought I remembered the price of Panadol erroneously. I had thought they cost somewhere in the range of $3.30 for a 30 tabs pack..... now it's $4.30?? That's a 30% increase in price right there! Let's say I have rememebered a wrong figure, but I am sure that Panadols did not use to cost more than $4 (I remember the price started with a 3). So let's assume they used to cost $3.90. 10.25% increase even using $3.90 as baseline! Should have stocked up on stuff before the hikes. Yikes!
I guess what they say is true. Two things in life that cannot be avoided. Death and Taxes. So, there is seriously nothing that can be done with the recent increases.
All I can say is that I will avoid using NETS at all now. I have always been a low frequency user of NETS, but I will now consciously avoid using it.
It will not help me get cheaper prices, as any price increase will be tagged on for every single mode of transaction, but it's just that I'm doing what NETS says. There is competition out there, which is why NETS needs to raise their transactions fees. Therefore, I will help give them a run for their money.
The previous merchant charges that NETS charged merchants range from 0.35% to 0.55%. This is supposed to be increased in stages till 1.5% to 1.8% in September.
Let's take the lower end of the scale here and do some comparisons. Let's assume that all NETS transactions attract a flat 0.35% merchant fee.
Let us further assume that the daily transactions through NETS amounts to 1 million dollars (this is totally untrue, just a number I grabbed for easy calculation).
Pre-hike fees for NETS: 0.35 % of $1000000 = $3500
Post-hike fees for NETS: 1.5% of %1000000 = $15000
This is an increase of $11500 in merchant fees for every million dollars transacted based on the lowest merchant fee rate.
Now, if people were to start boycotting NETS, how large must the boycott be before there is a significant difference?
First, we need to find out under the new charges, how much money is required to be transacted in order to gain the fees.
$3500 / 1.5 * 100 = $233333.34
That's right. Where it used to take one million dollars, it now takes 233 thousand dollars. They can lose $766667 (76.6%) worth of transactions and it won't make a difference for them.
Now it's up to YOU to make sure we give them a run for their money since their reason for the current increase is competition from other cards. *guffaw*
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