[Verdict] CDG cabbies need not accept VISA from June 2013
Stand-off over card surcharge escalates
Visa says that ComfortDelGro has said it will stop accepting Visa cards by early June, after the card company told the cab operator to remove a 10 per cent surcharge for fares paid with Visa cards. -ST Jessica Lim
Mon, Mar 18, 2013 The Straits Times
THE wrangle over credit card surcharges has intensified.
Even as the National Taxi Association (NTA) urged parties to sort things out for the sake of consumers, the Association of Banks in Singapore (ABS) has come out in support of Visa.
Last month, payment company Visa told ComfortDelGro it would pull out unless the cab operator removed a 10 per cent surcharge for fares paid with Visa cards.
According to Visa, ComfortDelGro replied that its cabs will stop accepting the cards by early June.
NTA adviser Ang Hin Kee, who is an MP for Ang Mo Kio GRC, urged the parties to find a solution. He told The Straits Times yesterday: "If a commercial deal does not work for you, work out a cost structure that does."
As it stands, commuters and taxi drivers will get the short end of the stick, he added. Consumers because they are worse off with one fewer payment mode, and taxi drivers because they will need to explain to passengers why they no longer accept Visa.
Other cab companies like Premier Taxi, TransCab and SMRT also levy a 10 per cent fee on card payments. Visa will be approaching other taxi operators as well, and has formed a 20-man team to conduct spot checks.
Other payment companies, including MasterCard Worldwide and American Express, did not want to say if they would follow Visa's lead, but they opposed imposition of surcharges by merchants.
Banks, including DBS, Citibank and OCBC Bank, also shared the same view.
"We understand and support Visa's decision to remove acceptance from ComfortDelGro taxis," said ABS director Ong-Ang Ai Boon. "We do not encourage the practice of surcharging because it unfairly passes the cost of acceptance onto the consumer."
OCBC Bank said it sent a letter to merchants late last year to remind them not to surcharge. The bank also imposes a US$1,000 (S$1,250) fine for a first violation, and up to US$25,000 subsequently. It declined to say how many merchants have been fined so far.
"The banks must be firm in penalising errant retailers. Some even allow the bigger merchants to bend the rules," said Consumers Association of Singapore executive director Seah Seng Choon.
He pointed out that DBS Bank, through which ComfortDelGro receives Visa's services, had allowed surcharging to go on for years.
Cabbies were worried that Visa's pullout may affect business.
"If customers ask if we accept Visa, and we don't, they may choose the cab behind us." said Mr Thomas Teo, 45, who has driven a ComfortDelGro cab for 18 years. He added that 10 per cent of his customers pay by Visa.
Several consumers The Straits Times spoke to were worried about not being able to use Visa cards in cabs, but some considered the bigger picture.
Real estate agent Cecilia Cai, 30, said: "I hope this will push shops to rethink surcharging. I don't think it's fair to us, especially when they are not allowed to (surcharge)."
ComfortDelGro did not respond to queries, but other merchants that imposed a surcharge on credit card transactions did.
CTC Travel charges customers an extra 2 per cent to buy an air ticket by card - the same amount the company has to pay banks for the service. Said its spokesman Alicia Seah: "Should consumers wanting to use their cards mean that merchants should be penalised for it?"
