Visa cards

Press, 2 December 1978, Page 12

Visa cards

Sir, — As I find Mr Mead’s reply to my letter about visa cards unsatisfactory, 1 wish to take the matter further. Because of the complexity and diversity of reasons for inflation, it is virtually impossible to find facts or evidence either for or against the theory that visa cards will cause higher prices. However, logic says that if retailers must pay the bank 3 per cent - 5 per cent on visa transactions, this will eventually be passed on to the consumer. Mr Mead claims the visa system is based on the “user pays” principle, because cheque • account customers who use visa cards will pay a small monthly charge. I challenge his claim and ask, if the user pays, why does the retailer have to pay too? How does the bank justify being paid twice and charging a high 3 per cent - 5 per cent? If 3c is enough to cover costs on each cheque transaction now, (for example on a purchase of 8100), then why should the same transaction, using a visa cards, cost S 3 to $5? — Yours, etc.. VIRGINIA JUDD. November 22. 1978.

[Mr R. E. Mead, marketing manager of the Bank of New Zealand, comments: “The letter from Virginia Judd really covers similar ground to that already discussed in previous correspondence. We feel that the bank has already adeqtiatelv answered the questions raised and see no purpose in entering into a disquisition on the matter.”]