Given each Afterpay sale costs vendor 30c + 4-6%, if paying by cash (you know the stuff) or Visa/mastercard credit or debit card, why don't I get a discount of say 5% given vendor receives the income at a much lower cost of transaction fees.
Why should you? Also how to determine if cash is worth it or not. If it's a $1 pack of gum then handling the cash might be more expensive than having you swipe your card. Spreading out payments on low value items over four fortnights was a stroke of genius and it won't be long until all the banks start offering their own version of it. Afterpay makes you more money because if the customer didn't have the option to pay with Afterpay they would have bought the item somewhere else, or bought something else from somewhere else. Which means you as the business owner get to keep 100% of NOTHING.
Do people literally walk into a shop, see something they love and when they find out after pay isn’t available, not buy it?
What were they doing 2 -3 years ago? Not spending? Lol
What were they doing 2 -3 years ago?
Layby?
Every single day people walk into shops and see things they would like to own but can't afford to buy right now.
According to after pay, Seasoned users use it around 50 times a year.
If you bring forward your purchases by a few weeks, after a few weeks you are simply catching on prior purchases and payments. So AP does not help someone own something they can’t buy right now, they paying off debts from weeks before.
Afterpay is very dangerous for getting people to spend beyond their means, 2-3 years ago the afterpay target market was either, not buying, waiting for a sale or selecting a cheaper option. That's the key to afterpay's success they have found a way to target people too irresponsible for credit cards and somehow manage the risk.
What were they doing 2 -3 years ago? Not spending? Lol
Putting it on credit card.
Just not buying the higher value item and spending the money on lower value items instead, like food or experiences.
You are answering something i didn't ask.
No.
You can ask, I’ve asked many small shops this question and surprisingly lots of owners are happy to throw in something extra with my purchase (instead of discounting the price). A few have rounded the total for me.
Most business owners know it’s costly, but are told its needed to accept this form of payment as lots of younger shoppers can’t cash flow manage their purchases now days. But they honestly would love it if everyone just paid EFTPOS.
I think it would help the shop owners if the machines defaulted to a "savings" transaction rather than a "credit" transaction. At the moment, I think the card has to be inserted (instead of tapped) to be able to select the "savings" account that has smaller merchant fees.
Yes, this I believe is correct. Though least cost routing, is being introduced i believe.
Either way, it is still less than BNPL fees. Just as an example. ZIP announced their quarter results.)They state their net transaction margin to be over 2%. To explain this metric, their revenue less COGS over transaction volume is over 2%.
To put simply, for every $100 that goes through zip, they get 3(Maybe 4)%+ in fees, pay 1%+ in (COGS) fees to visa/MasterCard when users pay zip back and end up with over 2%+ margin.
3% to 4% Is a large number when your doing a yearly volume of 7billion dollars.
Remember, the government only takes 10% (GST) and that’s used for lot of public services.
All this is zip, which I believe Afteroay charges even higher %.
No wonder their share prices are rocketing, the cost to merchants and indirectly to all consumers is like a GST hike.
The same goes for take-away food.
Uber eats charges ~15%. Ask for a discount if the shop does Uber Eats.
Exactly, if you see a food place on ubereats. Call them direct and you will likely pay less.
Some value the convenience of delivery to the door especially on a really hot day or in bad weather.
You are already getting a discount when you spend your dodgy cash for products.
?
plmko is implying that the cash is untaxed or from illicit means
Yes, but the administration cost of handling your exception is exactly equal to the saving for the business, hence computer says no.
Processing cash payments are more time consuming than digital payments. They should be charging customers more if they want to pay with cash.
And for small businesses cash is a chance for employees to steal. It doesn't matter what year it is or what technology exists to avoid it, small businesses still set themselves up to be stolen from. At least with a card and Afterpay the employee can't steal.
For many small businesses cash is a great opportunity to avoid cash.
Some fast-food and Asian restaurants only accept cash.
Cash is their best friend because its easier to lose track of how much they're making.
You claim they should be charging extra, but I know of many who voluntarily off discount. Goes to show what reality is saying.
The discount is balanced out by underreporting the revenue.
Please prove it and report to ATO
@whooah1979: So I went ahead to see if I could prove or completely debunk your claims.
I asked ATO if its legitimate for companies to provide lower prices/discount for using cash. They said its common to give discounts for cash or surcharge for costlier forms of payment (credit cards etc). It is not illegal.
I also asked Aldi, who commonly gives a discount for cash payment over credit cards, etc why they do so. Their answer is they recoup the cost of payment to ensure their products are the lowest possible price.
It would seem your claims need verification if you were to be taken seriously.
When you go to Maccas on a Monday lunch do you ask for a discount since their staff are cheaper than on Saturday night?
It's called bait and switch.
Speaking out of my arse here because I want to offer you something of value, but not enough to do any research, but…
In the terms and conditions of Visa, MasterCard, and PayPal it forbids merchants from charging more for using those payment methods. Afterpay may likely do the same. Discounting all other payment methods is the same as charging extra for that one payment method.
Now as to how true this is, look at how many upvotes or downvotes I get. That is usually the best way to gauge accuracy on the internet. /s
Interesting that policies discriminating based on protected characteristics are apparently acceptable when phrased as a discount ("seniors discount") but not as an additional cost ("youth surcharge"). Why is it so?
Interesting also that you can get charged a 'surcharge' with visa/mc/amex. So that is not technically an inflated price, but an additional charge.
"If I'm Not Using cashback/flybuys/everyday rewards, etc. Shouldn't I Get a Discount?"
Your discount is your privacy, those who use those programs are getting their discount in the form of giving up their data.
You do not need to provide true data for all the 3 that I mentioned.
the true data is your spending habits.
@Neoika: Bit hard redeeming their rewards if you do that, those free knives will be impossible to accumulate if I used multiple cards
Until they needed to audit and ask for proof of id
Entitled much
What is point of using Afterpay for day to day expenses ? Shouldn't we have to pay extra with that ?
You assume that there isn't a cost associated with handling cash.
Someone has to count the cash and make sure the totals in the tills are correct, balance the books and make sure the day's takings are what they're supposed to be, transport it to the bank, and not to mention theft (or at the very least installing measures to prevent theft). All this costs money (after factoring for all this EFTPOS transactions are probably the cheapest method of accepting payments).
In a sense, the cost of accepting credit cards and lay-by services like Afterpay and Zip wouldn't be treated as a cost of accepting payment but rather marketing. If these payment methods make it easier or more enticing for a customer to purchase something and converts to them actually purchasing something that they would normally not if they had to pay cash upfront for it, then it's a marketing cost and has contributed to a higher collection of revenue even if net profits is lower on a per sale basis compared to the "fee-less" cash. It's profit and revenue that otherwise would not exist.
Also if you close your eyes while walking into the store and don't look at all the marketing and design they paid for, should you also get a discount? If you don't own a TV and never saw their expensive ad, why should you have to pay 10% extra for your products just to cover their marketing costs. It's an outrage, the biggest ripoff this century so far, you should call the ACCC, call Today Tonight, call all the women's magazines, the people need to know about this.
If it's 97-99c pay by card. If it's $1.02 pay by cash.
At the end of the day, for a retailer, it is advertising (or something like that). It is a business cost to attract customers and will be absorbed into the price of the goods. Even if you don't use afterpay, the cost will still exist unless you find a retailer that doesn't offer deferred payment methods. They might spend advertising budget elsewhere though, and still have the same price…or not.
I was told (admittedly many years ago and well before Afterpay, etc.) that a store cannot offer differentiated pricing based on the method of payment. In other words, you negotiate a "cash deal", only for the punter to then turn around a say they want it on an interest free deal. Whether or not that is, or was true, I'm not sure, but that's what I was told.
Re. Afterpay, etc. specifically, I would be surprised if there wasn't a clause in the merchant agreement that prevented stores doing exactly what you're talking about. You will still be able to negotiate a deal, but that wouldn't be able to "advertise" a discount for paying with an alternative method.
This is actually true. Once the price has been agreed, the offer has been made - the store cannot increase the price requested. Hence why stores generally won't negotiate just based on "but I'm paying cash".
Afterpay does have a "no surcharge rule" as well, you are correct.
Most business prefers card transactions due to cost with handling cash - you got to pay someone to count it at end of day and transport it to the bank, which can cost quite abit depending on the cash flow of the business. Other thing is theft…..cash is easily stolen and hidden under the radar, especially for large shops for multiple employees. The only place that likes cash is small businesses where they use it to evade tax basically………and that needs the owner or a relative to be the cashier all the time as their books will be so inaccurate there's no way to accurately reconcile the revenue with cash.
100% YES - if you're buying something substantial (e.g. a washing machine) and you pay with savings account eftpos.
Given each Afterpay sale costs vendor 30c + 4-6%, if paying by cash (you know the stuff) or Visa/mastercard credit or debit card, why don't I get a discount of say 5% given vendor receives the income at a much lower cost of transaction fees.
Flip it around, the business is taking a price cut of 4-6% for the item to get the sale via afterpay.
If the buyer is using afterpay then they most likely wouldn't be buying it anyhow.
Now if the business wants to take a price cut to get your cash sale, then just ask them.
Fairly sure afterpay charges an admin fee to the customer, so in a way you are coming out ahead
What admin fee to the customer?
This argument will be moot soon
Afterpay is switching to a credit card next month.
You use the card like you would any credit card.
You then pay that card off over 4 fortnight’s.
card will go through eftpos machine at the retailer etc.
It may have a Zip 10% off promo soon.
So it has the same fees as visa and mastercard? Don't think so.
Same argument will apply.
As a Afterpay retailer this is what we have been told
The fees we pay will be removed from the balance at settlement.
fee is deducted from your settled amount when you settle your eftpos machine
and
As part of this change, we are reducing our fees significantly, accepting a Afterpay Card will be no more expensive to your business than accepting any other Visa Card
Will it still be an opt in service or pretty anyone can accept afterpay as long as they accept Visa transactions? (And the cost for doing so is the normal Visa merchant fee?)
That won't do their share price any favours in the short term with reduced margin.
@tm32: Doubt it, they're not in it for the fees paid by merchants, they're in it for the late payment fees.
Yes. Always ask. If they say no, ask for the manager. Tell them if you don't get a small discount you will use afterpay, which will cost them more.
Just like some stores impose credit card surcharges, there should be afterpay surcharges or discount for not using afterpay.
Okay, so have been testing. All purchases at least $100, and used visa.
Jbhifi, hardly normal, tgg and many small stores happy to give a discount or throw in other things.
Can you expand on that a little bit?
Always ask is this your best price.
What shops? At Harvey Norman, JB hifi, good guys etc, you can, just ask. The prices have those interest free things and stuff like afterpay factored in.