POLI vs Credit vs Paypal

peterpeterpumpkin on 14/01/2013 - 01:42

Hi everyone,

After doing some investigations into merchant fees I ran into a little surprise today.

As naive as I was, I had always thought that the payment method of the future would be POLI - the payment method whereby your personal banking website is "hijacked" and populated with the correct direct debit settings, potentially saving yourself some exorbitant surcharge fees in the process.

Thinking to myself "This is great - everybody wins, the merchant and the consumer save on excessive intercharge fees…" I casually decided to visit the POLI website (http://www.polipayments.com/merchants)where I found this: Standard: $0.30 + 0.9% (capped at $3.00), with "volume discounts" for corporations. As my utopian system crumbled before me I decided to research the average merchant fee for credit cards in Australia, which came out in 2011 (http://www.smh.com.au/money/borrowing/card-users-pay-dearly-…) to 0.81% for Visa/Mastercard (BTW, the New Zealanders have/had it REALLY bad…). And of course there's Paypal, who at their absolute best offer "1.1% plus $0.30, based on monthly sales volume".

So if any of you out there are merchants or otherwise knowledgeable, why on earth would so many high-volume websites (e.g. Jetstar) be offering massive discounts for POLI transactions (while (historically) ripping off CC payers with surcharges) while every new on-line business seems to be offering special discounts for using Paypal? Are there special deals going on behind the scenes or other CC fees or difficulties that I'm not aware of?

Also, are there any better deals out there that can perhaps replicate instant direct transfers? Surely there has to be a way to screw over the banks (which of course will only be temporary as they'll move to charging for direct transfers…)?

Financial

Comments

  • RockyRaccoon on 14/01/2013 - 08:01

    why on earth would so many high-volume websites (e.g. Jetstar) be offering massive discounts for POLI transactions (while (historically) ripping off CC payers with surcharges) while every new on-line business seems to be offering special discounts for using Paypal?

    I dont fully understand, but last night I was reading this article.

    http://www.dailytelegraph.com.au/travel/australian-traveller…

    Issue seems to be that you dont get credit card safety net, in the case of the article which is about airline surcharges it would seem to imply if airline goes bankrupt. And it gives airline a way to escape being pinged for applying surcharges in that they do have an alternative way for you to pay.

    • peterpeterpumpkin on 14/01/2013 - 10:07
      +1

      Thanks. That was an interesting read. I had a feeling there may have been a sinister motive behind embracing the alternative payment methods.

      So I guess if POLI had an equivalent safety net and its use went up to say 80% instead of 3% the companies would simply make one of the credit cards surcharge-free.

      I find it disconcerting that we're migrating to a sharp decrease in physical money transactions but there's no personal freedom over something that's meant to be yours in the first place. With all these payment methods the banks and pseudobanks have no problem taking just ~30 cents for a sub-dollar transaction (which can be a third or more of the transaction) but demanding a percentage of the transfer for larger amounts as if they'd be physically transferring heavier amounts of money (I guess there are a few more bytes of data…). Maybe someone more economically educated could justify it.

      Do you think the day merchants start adding the actual merchant fee as a surcharge the previous prices will drop accordingly?

  • mskeggs on 14/01/2013 - 16:29

    Also, if you contest (decline) a credit card charge the merchant doesn't get paid unless it sorts out in their favour. If you want a refund of a bank transfer they have your money until they choose to refund it.

  • grasstown on 19/01/2013 - 10:20

    What I read, airlines use poli because its uncommon and most people don't have it, therefore they can charge 17$ return on all other payment methods . Apparently they have to include the booking fee in the fare price if they don't have a free option.

    So as soon as polo is common enough, they will introduce another payment system, so they can get their extra $17 in arbitrary fees.

  • Wally on 21/07/2019 - 15:17

    Has anyone had any trouble with a transaction with the use of POLi?

    Has any Australian bank made a negative public statement or held a customer accountable for 'revealing their account details to a third party" by using POLi payments portal?

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