Comments on: Price point

By: Anonymous2

Anonymous2 — Thu, 20 Mar 2008 05:49:45 +0000

One question, is the £14 million cost for cards related to interchange fees, loss of float or something else?
The cost of cash is, of course, subsidised by the government (and therefore by the taxpayers) but the costs of cards involve substantial profits to institutions running the business. Which may not be the same as the ones processing cash.
So I guess the point is that the taxpayers (who are also the users of cash and cards) should insist on the reduction of cards usage costs (interchange, float etc) as, in the end, either way, it costs them.
This, I guess, is what the EU/ ECB are trying to do with trying to push down the costs of interchange and e-payments. And they should get complete taxpayer support for this.
No wonder the VISA IPO is doing so well…

By: Chris Holland

Chris Holland — Wed, 19 Mar 2008 21:43:24 +0000

isn’t a large portion of the cost of cash borne by the taxpayer?

By: Chris Cipperly

Chris Cipperly — Wed, 19 Mar 2008 21:28:58 +0000

Implicit in product pricing should be the cost of goods sold. I’m puzzled by those who suggest and institute premium pricing for cash transactions but do not charge fees for credit/debit processing. The practical reality today is that consumers expect to be able to use plastic and the merchant must provide or perish. In handling of cash you achieve some level of economies of scale which are never achieved in the card environment.