- Ike Williams is a stud sheep breeder from South Canterbury.
Sunday, July 15, 2018
OPINION: I am in Colombia, a stunning South American country.
Apart from a nice climate, great people and unbelievable fruit, being here again has really reminded me of how much modern technology is part of everyday life.
It´s just so easy to keep in touch with family and friends in New Zealand. I'm probably more in contact with my 18-year-old daughter over here than when she was living with me.
We are constantly reminded how technology can make our lives easier, quicker and more cost effective. The boundaries of its use in business and our personal lives is continually being challenged.
Travelling these days, is different to 30 years ago when I was last in South America. If you know what a traveller´s cheque is, I am pretty sure I can describe you as an old bugger. These days you carry a credit card and a mobile phone. You use your credit card to go to an ATM machine to get money out or you simply use it to pay for every day purchases in whatever country you are in. Clearly this is easy and convenient.
The technology to do this is high powered computers, with well-developed moron-proof software. I am pretty confident in assuming that there is no labour input in any of these transactions, so why then are we being ripped off every time we go to change money via a bank ATM, pay for a meal at a restaurant or simply buy some groceries with a credit card?
I believe we are being ripped off in so many situations these days with the use of modern technology. If I take out the equivalent of $50 over here, the Colombian bank and my bank in New Zealand between them (to be fair most of it is the Colombian bank) take 12 per cent more of this for the privilege of me gaining access to my money. I go to use my credit card and most businesses will charge an extra 5 per cent to pay by credit card because it costs them money to recover their money.
I paid for two weeks accommodation and tuition here in Medellin last week and my offshore service margin on my credit card account was $19.69. For doing what? The computer software handles everything and it comes up on my account immediately. What costs are they recovering?
I don't know what the transaction costs are for foreigners when they visit New Zealand, but I would imagine they are paying too much as well.
It´s not just foreigners in New Zealand, we all know businesses which have tried not to accept our credit cards because of the transaction cost, but these days it's almost compulsory to have this method of payment. I know lots of businesses which don't carry the online money transfer service PayPal, because of the transaction cost. Presumably its more expensive, but for what - not having to put my pin in or sign a piece of paper?
How can the exorbitant interest rates charged for credit card debt these days be justified if you don't pay it off every month? We have had a historically low level of interest rates for years now, but still they charge double-digit interest rates on this debt. Perhaps they can justify this and I would welcome a publicly explanation to enlighten us all. Surely its something the Commerce Commission could review and assure us that everything is fair and above aboard.
I realise that a lot of work goes into the development of software and its update and maintenance, but how can high charges be fair? Is it not just an excuse to collect money? Surely the cost of these transactions with no human input must be parts of a cent these days, not 10, five or even one per cent of a transaction.
I know this topic is a bit outside of my normal farming musings, but it's something that grates me. I wonder if it was the same brilliant accountant who told businesses, years ago now, that when they send their bill, add $10 to $20 and call it ¨sundries¨ We all know this is garbage. If you question the business, they usually reply it's for grease, paper towels, stationary, postage, soap and the like.
I can't say these overly high credit card fees are ruining my visit to a great country, but they still get up my nose.