Debit Card Con by Plus net

[#1]

For Extra
Cost of CC/DC Transaction - ~20p
Cost of 5 mins advisor time - £1
Possibly more time?
that comes out to a min of £1.20. you seem to be saying that PN should only charge what they get charged from the bank, and not the cost of the advisors time calling the customer and processing correct details or just dealing with the issue electronicly?
rough figues i know, but puts the £1.50 into contrast as semi-reasonable.

[#2]

when ever I have been into my local Nat west and asked them about Nat West credit cards, they say - "it is nothing to do with us, they are a separate compnay, ask them".
And as for Lloyds Amex, what a shower they are, whent Lakeland Plastics opened a branch in Chelmsford, they gave then and a firm in Dorset the same account number, then proceded to charge the customer twice, that took over a month to get the money back

[#3]

Personally, I think it is never wise to give continuing authority on a card, especially when there is an alternative method for paying.

[#4]

Quote from: thisoldman

The appropriate fee should have been between 18 and 20p.

With a 20p rate and a likelihood of rejection being 8 times higher than DD we can easily suggest that PlusNet needs to account for the 8 times rejection rate by making the rate 8 times the "appropriate fee", 8 times 20 is, let me see, £1.60, so seems about right to me wouldn't you say?
Look at it another way, credit cards run at around 2.5% per transaction (let's say) and lets also say PN has 300,000 subscribers of which 10% use credit cards so we have 30,000 people who are costing PlusNet 2.5% of their income, would you happily sacrifice 2.5% of your income when you don't have to?  I wouldn't, and PlusNet isn't a warm cuddly environment, it's a business, it's primary role is to make money the best way it can, not lose money through processing fees.
Moving people to DD would be a positive step for any company.  If my debit card refuses a transaction, PlusNet would still have to pay the transaction fee but I incur nothing, not even a notice that I've had a failed payment.  if however I were to have a DD refused, my bank would hit me with a £25 charge.

[#5]

why dont you do your own research jelv instead of knocking other peoples research or ..are you not capable of doing that

[#6]

The first principle of good research is that when a result obtained that looks like it is absolute tosh is to double check it and if it is absolute tosh discard it.
So lets test your result.
20p each paid by all card payers gives for the 12% that fail £1.67. At the minimum rate of £5.93 that represents 17 minutes to do all the procedures around contacting the user and reattempting the payment and suspending their service in the meantime, then restarting when the payment is made. Realistic? I think not!
But then lets look at the assumptions in that get us to 17 minutes. It is assuming that the bank provides the card payment service to Plusnet for free. If the average payment per user is £10 assuming 2% for credit cards that's 20p. Hang on! That's all the 20p gone already.
Then there are the overheads of wages (someone being paid £5.93) costs the company more than that due to taxes etc.
Then there is a proportion of the cost of running the building.
Then the staff will need computers etc to do their work.
Anyone with more than two brain cells to rub together will realise that 18 to 20p is complete and utter tosh. In addition anyone with an iota of common sense would realise that there is no way a bank would know how much administering payment by card would cost if you take in to account all costs including failed payments.
We've seen reports of other organisations charging £10 for a failed card payment. If their failure rate is around 10% that represents a surcharge of £1 (which does not include the card fees).
The more I think about it the more I'm convinced that £1.50 seems rather on the low side!

[#7]

bear in mind that in the example of LloydsTSB they charge a business the following for receipts.

Quote

Account receipts Transaction type Charges Automated credit (includes telephone and Internet banking) 20p Automated credit – Faster Payments inbound 20p Credit paid in at Lloyds TSB branch 70p Credit paid in at another bank 70p Credit paid via nightsafe £2.00 Transfer (transfer from another account in your name with the sort code starting with 30-xx-xx) Free Other credit 70p

Now I would class a debit card payment into the account as "other credit" and therefore subject to a 70p fee.  Telephone/internet banking is not using your debit card - it is quoting your bank details for the payment.
Therefore £1.50 is extremely reasonable when you allow for the time spent processing these transactions.

[#8]

And they have to do the same if a DD fails.

Quote from: jelv

Quote from: glloyd Ah so it does not cost £1.50 for one off payments but it does for regular payments. Funny I thought banks charged the same no matter what the purchases. I think this proves yet again the £1.50 is a rip off. No it doesn't. For one off payments the admin costs are much lower, e.g. if it's for the postage for a router and the payment fails Plusnet don't send the router if the payment fails, the user is aware immediately and will sort ot the problem and attempt the payment again. If it's a regular payment Plusnet have to do all the debt chasing and take steps to restrict the service, then when the payment is made restore the service.

[#9]

Correct, but only 1.5% of DDs fail compared to 12% of card payments.

[#10]

Quote from: jelv

Correct, but only 1.5% of DDs fail compared to 12% of card payments.

Ahh, but if 3333 people pay by DD then 50 payments fail.  Whereas you only need 417 payments by card to get the same actual number of failures.
Therefore to get a meaningful comparison I would ideally like to know the %age paying by each method; as there is nothing to say that card payments are more inherently liable to fail as 12% of 10% is less than 1.5% of 90% for example.

[#11]

So they claim, I have my doubts. In my experience more people tend to get to the limit of their bank account than their credit card limit.

[#12]

15% card, 85% DD

[#13]

so therefore the failure rates are:
Card 1.8%
DD 1.3%
It's a lot closer than you'd think based on their initial statement and a move to get a 1/3 of those currently paying by card would mean that more DD customers would be suffering failed payments assuming "failed rate" stayed constant.

[#14]

geoff,
Surely that would depend on whether the customer was at fault, or the process. (Unless I've misunderstood what you are getting at!).
The point is that more and more companies are increasingly moving away from monthly Credit Card subscriptions (i.e it seems from this thread that TalkTalk demand DD payments!). There are good reasons for this.... as a process they cost more in fees and cause more problems, and therefore take up more man-power hours to handle and support too, which all cost more money! Therefore this is a strategic decision, and I really don't see these discussions changing that decision.
The fee has to be high enough to "gently persuade" people to move over to DD and I think they pitched it right.
I am much happier with Plusnet offering CC as an option (for a fee), than a blanket "must pay by DD" like TalkTalk. It is then up to the individual if they want to pay that extra fee, or move to DD, or to find another supplier.
Mike

[#15]

Obviously I'm a strong advocate of paying by DD but I fail to see why anyone should want to continue paying by debit card as it still comes straight from ones current account and provides one with none of the guarantees.