SHOPS FEEL SNAPPER'S BITE
9 June 2008TOM PULLAR-STRECKER
WELLINGTON bus ticket agents say they will be short-changed by the Snapper smartcard, which will be used to pay for bus travel in the capital from next month.
Infratil and ANZ have invested millions of dollars in Snapper, which they intend to promote as a nationwide payment system for public transport and other small purchases. It is New Zealand's first eftpos-compliant contactless prepaid chip-card.
The Retailers Association says Snapper is "state of the art", but chief executive John Albertson says a lack of incentives for retailers to sell and top up Snapper cards is putting their successful introduction at risk.
"What could be a real advantage for transport users and providers could be short-changed by people trying to take margin out of the model, which should rightly be owed to the retailer."
Paddy's Lotto and Post owner Chandra Patel, an unofficial spokesman for a group of disaffected Go Wellington bus ticket agents, says some shops earn up to $20,000 a year from a 3 per cent commission on sales of 10-trip and monthly bus passes.
Retailers will instead earn $1.50 from selling the rechargeable Snapper smartcard and will keep 20 cents from a 25 cent fee customers are charged each time they top up a card.
The Retailers Association estimates this will slash the commission on tickets sales by two- thirds.
"Basically, there is nothing in it for retailers," says Mr Patel. "I don't think a single agent is happy with the arrangement."
Go Wellington spokeswoman Megan McSweeney says adult 10-trip tickets will be phased out some time after Snapper cards go on sale next month. Details will be "fully communicated" ahead of that change, she says.
"It is disappointing to hear of a small number of people who do not wish to take up the service, but we respect their right to do so."
Bus travellers will be able to buy Snapper cards over the phone and online -- and top them up online -- without visiting a retailer. Preparations for the launch of the payment card are continuing despite the unrest over agent commissions.
ANZ subsidiary Eftpos NZ will begin trying out a Snapper eftpos terminal today and Snapper readers will be installed in Go Wellington buses by the end of the month.
Charles Monheim, general manager of Infratil subsidiary Snapper Services, says the cards will go on sale to the public on July 1.
While Infratil can go over the heads of ticket agents and sell Snapper direct to the public, it will need the support of the wider retail community to turn Snapper into a ubiquitous payment system for small goods.
The Retailers Association is unhappy that shops will have to pay a 1 per cent sales commission when accepting Snapper as payment, and says there is "no justification for the fee" since Snapper's backers will earn interest on money loaded onto the prepaid cards.
Mr Monheim says 20-25 retailers have agreed to support Snapper so far, some of which are Go Wellington agents.
The 1 per cent fee is competitive with fees charged by Visa and Mastercard and the income is needed to establish and market the payment scheme, he says. Retailers could pass on the charge to customers if they wished. They would benefit from "quick, contactless" payment transactions that would cut queues, and from Snapper's ability to support sophisticated customer loyalty schemes.
Shops will need to buy or rent a contactless smartcard reader to top up and accept Snapper, and retailers that don't use ANZ Bank as their eftpos merchant will need a new eftpos terminal, which Mr Patel says will cost shops up to $2000 -- until or unless dominant eftpos network provider ETSL agrees to support Snapper.
Following discussions with the Retailers Association, Eftpos NZ has agreed to provide Go Wellington ticket agents with free Snapper terminals for 18 months.
But Mr Albertson says many shop owners are locked into three- year contracts and face penalties if they change their terminal supplier before those contracts expire.
He says the association will continue talking to Infratil and Snapper "to see what other concessions can be granted".
© 2008 Fairfax New Zealand Limited.
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