Supermarket chain Pingo Doce announced today that its checkout staff are again accepting payment by bank card for purchases under €20.
In September 2012 Pingo Doce introduced the minimum transaction level for those paying by plastic in order to put pressure on the card processing company SIBS whose fees it said were excessive.
The reversal was posted in shops on January 2 and comes at a time when the Portuguese parliament and the European Council both are preparing to adopt new regulations to fix processing fees to 0.2% for debit cards and 0.3% for credit cards.
These talks and impending reductions have seen many banks and financial institutions lowering the fees they charge for electronic payments.
Jerónimo Martins, the holding company for the 380 store Pingo Doce chain, said that its September 2012 decision was all to do with cost control and the unreasonable fees charged by banks.
The company said this week that the measure always was temporary and would be revised when management has a better deal, which now it has got.
With this ownward pressure on fees being forced on the financial industry, coupled with actions such as those taken by Pingo Doce, the consumer should win out.
In the first 12 months of ‘cash only up to €20’ Pingo Doce saved an estimated €5 million and the warnings from SIBS that people would shop elsewhere were not borne out.
The Portuguese are heavy card users with 68% of transactions made with plastic. The only EU country with a higher usage is Denmark at 69.2% against a European average of 39%.
The European agreement to regulate card processing fees should be reached early this year as Brussels is keen to regulate fees, seeing the current system as consumers having to ‘pay to pay’ with "hidden fees that banks collectively impose on retailers."
Retailers simply pass the costs on to consumers which makes products more expensive, an estimated levy of €3 billion a year across member states.
Portugal’s Association of Bankers does not agree with the Brussels move and warns that it will be recouping the €140 million these measure will cost its members by raising other bank charges. This is why they have a deservedly bad name.
Comments
Not just in Portugal. The problem is international and systemic. Most money is created as debt by banks, not issued by governments as people tend to assume. Don't blame the Portuguese, blame Goldman Sachs, IMF, ECB, etc.
Over 3bn was spent on plastic by the Portuguese this Christmas. How much of this is soon found to be unrecoverable by the banks ?
These costs then spread over the good customers ?