End consumers will begin to cover the transaction costs of the firm
An experiment took place in supermarkets in the United States. In order to fight for the environment there was a ban on plastic bags, which were previously issued free of charge. Now the cashiers started asking if the client needs a 10 cents paper packaging. And despite the fact that the amount is minimal, queues at the box office increased, as the operation began to take extra time and destroyed the idyll of buying all goods for one check.
A similar situation has arisen in the banking sector — merchants will begin to charge an additional fee for processing transactions. The Commission would not be too large and would rather resemble a paper bag topic. But it entails unnecessary problems, including ones for end consumers. The commission for processing transactions can be legally shifted to the shoulders of buyers since 2013 in the United States. However, each of the states regulated which of the existing businesses can use the option.
However, not all merchants were concerned with this question as it was a question of insignificant sums. There were also no attempts to force the buyer to pay cash or pay with beneficial for merchant (own) cards. For business, the fact of buying is important, and the availability of expanded opportunities for its implementation has always been a plus. But in the winter of 2019 in the state of New York a regulation obliging customers to charge transaction fees was issued. The issue is being discussed in the press, since it involved a violation of the rights and freedoms of end – users who would pay for an incomprehensible service.
Who paid the transaction costs of the firm in Australia and the UK?
In Australia, transaction fees have been collected since 2003. Seeing a business idea there, merchants overestimated prices for some services. Of course the consumer was the extreme. In 2016-2017, Australians had to adopt laws prohibiting large and medium-sized retailers to take extra money from customers. The network of car dealerships was even fined for a symbolic sum of $12 thousand. In the United Kingdom, since 1991, it has been legally permitted to charge users of the transaction fee. Customers paid attention to this in 2011, only when it turned out that tourist operators charged additional funds from clients when booking trips.
In 2018, the UK had to issue a law on the prohibition of excess fees on consumers. If we talk about the United States, the imposition of unnecessary commissions on the shoulders of consumers can lead to undesirable consequences for merchants — migration to another bank that does not take unnecessary fees, or transition to cash payment.