Woolies denies customers payment choice
01 April 2010
The Woolworths retail empire has decided to deny customers choice about how they pay for their groceries with a new money grab announced on April Fools Day.
“Woolworths is dictating to its customers which payments system they use in its stores,” said Louise Petschler, Abacus CEO.
Woolworths today announced its intention, from later this month, to route all its transactions by customers using scheme debit cards via the EFTPOS network. Customers with scheme debit have the option of pressing the ‘credit’ button which offers them extra protections and generally reduces their bank fees. These customers will now be forced by Woolworths to select ‘savings’ or ‘cheque’ when shopping in the stores under Woolworth’s empire.
“Woolworths benefits from this change because the background interchange fees on EFTPOS transactions work in its favour,” said Ms Petschler. “It’s disappointing to see this major retailer using its market power to restrict consumer choice – while pocketing the benefit.”
“Credit unions and building societies have been strong supporters of scheme debit for many years because cardholders can use a scheme debit card online, overseas, over the phone, and through the post, as well as in shops – using their own money. EFTPOS can only be used in shops.
“It’s a pretty sour April Fools’ joke to dress up a money grab as support for the ‘Australian-owned’ EFTPOS network.
“Woolworths and other big retailers have spent years resisting reforms to promote the EFTPOS network while enjoying a multi-billion dollar windfall from reforms imposed by the Reserve Bank on the Visa and Mastercard schemes.
“The only reason Woolworths can get away with this is that credit unions, building societies and banks that issue scheme debit cards typically allow the cards to also be used on the EFTPOS network. Credit unions give their members the right to choose which system to use. It’s a shame Woolworth’s doesn’t have the same commitment to consumer choice.
“Essentially, scheme debit has been a better deal for smaller card issuers, like credit unions, and consumers, while EFTPOS has been a better deal for big banks and big retailers.
“The Reserve Bank’s interventions in the market have overwhelmingly benefited big retailers and this is just the latest example. Woolworths is taking advantage of the RBA’s removal of the ‘honour all cards’ rule by declaring it will force customers using scheme debit to only use the EFTPOS system while shopping in its stores,” Petschler said.
For more information, please contact:
Luke Lawler – Senior Adviser
02 6232 666; 0418 213 025;
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Mark Degotardi – Head of Public Affairs
02 8299 9053; 0419 998 201;
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