Consumers' rights lost with a swipe

Consumers' rights lost with a swipe

SINGAPORE - So VISA is playing hardball, and ComfortDelGro is saying - unofficially at least - that we don't need your cards.

Why should consumers care? Cash is still king when it comes to paying for cab rides, but the stand-off between Visa and the country's largest taxi operator is really part of a larger battle, one which could affect how Singaporeans pay for goods and services in the future.

Credit card surcharges, be they for cab rides, air tickets or jewellery, are fairly common here. The unfortunate thing is that most of us take it lying down.

An IT retailer once informed me that paying for a laptop by credit card would cost me 3 per cent more. I made a quick dash to an ATM to get cash, and felt that I had saved money by doing so.

In reality, I was being denied my rights.

Merchants know they are not allowed to levy a surcharge on credit card users, a condition clearly spelt out in the agreements they sign with banks.

But they also know they are untouchable. It is not illegal to impose a card surcharge, and banks - tasked to enforce the rule - are reluctant to get tough because it means less commission for them.

In their defence, merchants say that absorbing the commission will put an unfair squeeze on their razor-thin margins. Better to let customers pick up the tab, if they insist on paying by card.

Their arguments are valid, but why invest in card facilities like terminals if you are simply going to penalise customers for using them? Shouldn't credit card costs be considered business costs too?

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