Govt. Mulls Ban on Credit-Card Surcharges

[chua_riwap]

Govt. Mulls Ban on Credit-Card Surcharges


In response to numerous consumer complaints, the government is mulling the issuance of an administrative rule banning credit-card surcharges made by Philippine merchants.

Bangko Sentral ng Pilipinas Deputy Governor Nestor Espenilla said the Department of Trade and Industry (DTI) may issue a memo circular that would curb merchants’ practice of imposing surcharges whenever customers use their credit cards.

“This is a consumer protection issue. [That is why] the DTI is mulling over the memo [while] there are pending resolutions in Congress to address the issue,” Espenilla said.

Surcharging makes purchases using credit cards costlier since it involves imposing an additional fee for buying goods or services on credit. The merchant surcharge is on top of the interest and other charges that the credit-card company collects from the cardholder. Surcharges run up to 8 percent of the total amount bought and these are imposed supposedly to recover the cost of processing that credit-card companies collect from merchants.

The CCAP, however, denied that member companies charge merchants high processing fees for credit-card use. “In fact, we’re the lowest in Asia,” Rolando Tanchanco, a CCAP official, said.

During last week’s Credit Card Association of the Philippines (CCAP) conference, the group said surcharging is a major concern. Alex Ilagan, CCAP president, said that before any merchant can offer credit card payment facilities to its customer, it signs an agreement with the credit card company that it would not impose surcharges on credit card purchases.

In the eighties, gas stations and grocery stores were the most common merchants that imposed surcharges on credit-card purchases but appliance stores and travel agencies have since joined the bandwagon, Ilagan said.

Some stores apply surcharges on their goods without having to indicate the percentage of surcharge by offering “discount” prices for cash payments and higher prices for cash purchases.

“We cannot penalize them,” Ilagan said, adding, “All we can do is to warn them for engaging in the practice and later on we disaffiliate with them.” The CCAP official, however, failed to provide actual cases of merchants that were stricken off the list.

Tanchanco said that merchants should not impose surcharges since it would deter customers from purchasing on credit, especially big-ticket items like appliances and electronics. He said data show that credit-card use significantly contribute to the sales of a business establishment and deterring customers from using this would negatively affect merchant sales.


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Madalas ganito nga ang nangyayari. May interest na, babanatan ka pa ng surcharge sa item na binili mo using your credit card. Sakit sa bulsa.

[the_wildthing]

Cash is king.

If you pay interest on a straight 100,000 peso loan on a credit card (not the fixed amortization type), that could be anywhere from 2,500 to 3,750 a month, interest only! You still need to pay part of the principal.

[Gumusut_Amige]

whole amount auto debit is the answer! pero pagwala kang pondo hhmmm... medyo may kabigatan talaga.

[bajumbo]

laki na interest sa loan tapos may surcharge pa.... sobra naman....

[Isuzoom]

ok pala taga govt. kung nag iisip.

[GasJunkie]

Nothing will come out of this..........Just posturing








:fly:


Edit hope not

[uls]

Our merchants are not yet as mature as those in more established economies.

Shops here still prefer cash. They slap a surcharge on credit card purchases to discourage payment using credit cards. That's not the way to go.

If ur a merchant and u want to sell more merchandise, u should encourage people to use their credit cards coz people would buy more on credit.

Kaya nagtataka mga foreigner at mga balikbayan coz people here carry around thousands of pesos in cash to go shopping.

[BlueBimmer]

with hardware items, hindi talaga pwede walang surcharge. like cements, piso piso lang ang patong dyan e tapos pag CC ginamit ng customer babawasan ng 7% ng CC company, e di lugi pa ang benta. hindi naman napupunta sa store ang 7% e kundi sa CC company/bank.

buyers have a choice, cash or card. kung ayaw nila ma-charge e di magdala ng cash. kung di kaya i-cash e di magipon muna.

[BlueBimmer]

Our merchants are not yet as mature as those in more established economies.

Shops here still prefer cash. They slap a surcharge on credit card purchases to discourage payment using credit cards. That's not the way to go.

If ur a merchant and u want to sell more merchandise, u should encourage people to use their credit cards coz people would buy more on credit.

Kaya nagtataka mga foreigner at mga balikbayan coz people here carry around thousands of pesos in cash to go shopping.

on the contrary, those charges are to offset the 7% charge of the CC company. some items with good markups are not charged the additional amount. but some items like machineries, generators, cements, plywood have very very low markups. kung walang surcharge malulugi ang store, babawasan ng CC company ang amount paid.

meron din mga ganyan like you mentioned but not every seller ganyan. kung mapansin mo electronics may REGULAR PRICE and SPECIAL CASH PRICE. thats coz maliit din sobra markup nyan.

[Kikkomann]

Kelan daw effectivity nito?