The merchant has to buy (or rent) an EFTPOS terminal. The bank also charges the merchant a setup fee to connect your terminal to your bank account. Once that has been done there are no more fees.
You have to look at the way it evolved. Because this is a service offered to customers by each bank in competition with each other, the competition drove the price per transaction to zero.
I think it's worth remembering what job the bank is supposed to have.
The bank is supposed to make it attractive for you to give them your money so that they can then lend it to others or invest it however they see fit to make a profit. Remember, you are doing them a service by handing them your cash, not the other way around.
If the price for them is to create infrastructure for payments offered free of charge in exchange for being allowed to have access to your money than that is a price that they should be happy to bear.
In NZ banks there are generally no monthly fees for personal accounts and no fees for transferring money to others. I would generally expect to pay zero bank fees at all so long as I'm not going in to overdraft. I'm not saying that everything is 100% sunshine and roses, but certainly that is the minimum I should expect the bank to do in order to earn the right to hold my money.
Yeah. Kindof. NAB has the debit card account free of charge, unlimited ATM withdrawals, transfers across banks free and attractive savings rates. CBA's fee is $5/mo unless you get a salary per month through your account. Pretty much the same for the 4 major banks.
In France you need to pay 60-120€/year for an account + CC. In Australia you don't need to pay. In US don't they beg you to open a credit card?
Yeah, pretty much. If you are responsible, you get back 1% of all of your purchases on the CC. And in the spirit of "who pays for that", it's the folks carrying a balance who pay for the 1% cash back on everything.
it's not the people carrying a balance that pay for that - it's the merchants. it's an extra fee added on to the credit card fee that a merchant can't predict nor can they avoid.
As a merchant, I charged people, say... $10 for something. The fee might be 2.9%, but if it was 'rewards card' (which I can't tell ahead of time) the charge would show up as 4%.
The cost is passed on to every in the form of higher prices. The people carrying a balance have nothing to do with this. That would simply eat in to the banks' profits. Why would they just randomly give people x% of the profits from balance-accrued interest?
I get what you're saying, but not everything costs money. For example, SMS piggybacked on infrastructure that already exists, so they are pretty much free to run (despite what your phone bill might say).
Similarly, this payment infrastructure could be a similar thing (maybe it opened up channels used for other mechanisms already?)
You have to look at the way it evolved. Because this is a service offered to customers by each bank in competition with each other, the competition drove the price per transaction to zero.