Latest / Best of Business / Brad Olsen: Infometrics Principal Economist on the Commerce Commission's plan to cap PayWave and online credit card fees

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Brad Olsen: Infometrics Principal Economist on the Commerce Commission's plan to cap PayWave and online credit card fees · Best of Business

• 0:09
  Speaker 1: You're listening to a podcast from News Talk zed B.
• 0:12
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• 0:16
  Speaker 2: Now the Comments Commission, as we've discussed in the show Reckons,
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  Speaker 2: the keywis pay about one billion dollars a year on
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  Speaker 2: payWave and online credit card fees, and the ComCom wants
• 0:25
  Speaker 2: to cap the fees. Reckons it could save keys two
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  Speaker 2: hundred and fifty million dollars of that billion every single year.
• 0:29
  Speaker 2: Brad Olson is Infametrix principal economis.
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  Speaker 3: Day Brad good evening.
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  Speaker 2: High time for a crackdown, isn't it?
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  Speaker 3: Well, it seems to be. I mean to be fair,
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  Speaker 3: I sort of thought we went through it's a year
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  Speaker 3: or two back when all of our credit cards earning
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  Speaker 3: options got slashed back and there was all this talk
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  Speaker 3: of greater regulation, but I certainly haven't seen it going
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  Speaker 3: around the place. Every time you go to pay for something,
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  Speaker 3: I've got to figure out which of the cards in
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  Speaker 3: my wallet I can use as which one's going to
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  Speaker 3: charge me the most, You know, which handwritten sign at
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  Speaker 3: the CAFA L restaurant I I have to pay. And
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  Speaker 3: I think the challenges is that having been around the
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  Speaker 3: world quite a lot so far this year. We do
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  Speaker 3: seem to be a lot more backwards than our thinking
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  Speaker 3: around payment systems. You know, many other parts of the
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  Speaker 3: world you struggle to see a card these days because
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  Speaker 3: people are using their phones or just tapping their watches
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  Speaker 3: or whatever. In New Zealand, you're trying to figure out
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  Speaker 3: if you're using your f coos you didit your credit
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  Speaker 3: which one and all of that I think creates you know,
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  Speaker 3: greater productivity challenges and costs for kiwis.
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  Speaker 2: Yeah, so is there going to be Are there going
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  Speaker 2: to be any unintended car I'm always I'm always reluctant
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  Speaker 2: to go in for regulation unless it really is warranted, right,
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  Speaker 2: because of things that can happen as a result. Is
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  Speaker 2: there any unintended consequence that I'm not seeing here?
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  Speaker 3: Yeah, I mean it's a fair question to ask, you know,
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  Speaker 3: I think you know, one of the payment providers has
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  Speaker 3: already said, look, you know, they don't think it will
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  Speaker 3: be particularly useful when they talk about all of the
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  Speaker 3: things that they've already funded. The fact that you know,
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  Speaker 3: we've got good network reliability, you know, some of the
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  Speaker 3: anti fraud measures that they bring in, the fact that
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  Speaker 3: often you can get you know, a fair bit of
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  Speaker 3: your money back if you are scammed. That's important. I
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  Speaker 3: don't think that we should lose it though. The idea
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  Speaker 3: here isn't that you make no money at all from
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  Speaker 3: these transactions, that you bring it down a bit, so
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  Speaker 3: maybe businesses can absorb that cost better and provide that
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  Speaker 3: sort of option out there kiwi. So yes, I think
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  Speaker 3: there are some potential unintended consequences, but I really do
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  Speaker 3: struggle with the idea that the rest of the world
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  Speaker 3: can do this and New Zealand can't. Maybe we're a
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  Speaker 3: little bit too small, but it really does seem like
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  Speaker 3: a big point of stration. It's not business's fault, you know.
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  Speaker 3: They often point out they would love to be able
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  Speaker 3: to provide that convenient option through to kiwis, but it
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  Speaker 3: costs them and they've got to somehow pass that on.
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  Speaker 3: But like I say, I'm really a little bit almost
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  Speaker 3: surprised and confused. I thought we had this conversation a
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  Speaker 3: few years ago, we decided we'd do something about it.
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  Speaker 3: Nothing really seems we've.
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  Speaker 2: Changed as at. Let me explain to you what happened
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  Speaker 2: a couple of years ago. The law passed a couple
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  Speaker 2: of years ago that gave them the possibility, gave them
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  Speaker 2: the options, gave them the tools. This is the Commist
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  Speaker 2: commission to be able to do this right, and I
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  Speaker 2: think they kind of put everybody on notice and they
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  Speaker 2: were expecting some sort of voluntary conduct, you know, and
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  Speaker 2: then nothing changed, and so now they're taking the steps
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  Speaker 2: to actually force it. Isn't that basically why you feel
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  Speaker 2: like you're having the same conversation.
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  Speaker 3: Wise, well, I think that's definitely part of it. I
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  Speaker 3: think it's also because there are so many flipping fees
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  Speaker 3: across the place, so I mean back a couple of
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  Speaker 3: years back, the first thing I think the change is
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  Speaker 3: what they call the interchange fees, so that has come down.
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  Speaker 3: But now this sort of proposal they're looking at is
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  Speaker 3: what I understand is around the schemes fees, So goodness
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  Speaker 3: knows how many other sort of hidden things there are
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  Speaker 3: that are down there. But it does seem to be
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  Speaker 3: a bit of a mirror go around. I'm certainly not
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  Speaker 3: feeling as a consumer like we get a good deal
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  Speaker 3: out of it. Local businesses don't feel like they're getting
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  Speaker 3: a good deal out of it, So it does seem
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  Speaker 3: like it's high time to do something about Brad.
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  Speaker 2: Good to talk to you mate, as always really appreciated.
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  Speaker 2: That's Brad Olson in for Metrics, Principle Economist.
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