Thursday, June 15, 2006

Small terminal supplier points to outdated retailer dogma's that PIN (POS) is expensive

Yesterday, Mr Mogendorff of Pinlinq, stirred the Dutch retail payment industry with an article in the Financieele Dagblad on POS-payments. He explicitly stated that retailer interest organisations have an over-fixation on the supposedly high cost of POS-terminals. That's quite interesting and correct.

In general the bank fees for retailers are quite insignifcant compared to their other business costs such as communication (ADSL), printer paper and what have you. But it is a historical habit of retailers to persist in complaining on the bank fees; they started doing so when Dutch POS-payments (PIN) were introduced and haven't stopped since. Meanwhile, the communication market has opened up (lowering fees), the terminal market has changed (with Pinlinq offering GPRS terminals for 200 euro) and the bank market has opened up (with fees lowered to 4 to 5 eurocents).

Stil, the Dutch retailers persist in whining on bank fees. And while it is now common knowledge that the cost of cash payments exceed those of PIN-payments, you can still see signs at the teller of retailers stating that low-value PIN-payments will be charged for 10 eurocent (that is still approximately the 25 guildercents they used to ask in 1990 when all the PIN started). And the retailer representative organisations remain unwilling to ask their constituency to remove those signs (and penalties for efficient payments). And they keep on demanding even lower fees than the 4-5 eurocent per PIN-transaction.

Similarly, their website on payment terminals ( has not so very accurate information on the best deals for payment terminals, suggesting that a GPRS-terminal would costs 1000 euro for the retailer. Of course that fiction is necessary to persist in the opinion that Dutch POS (PIN) is expensive and that all that it the bank's fault.

So all in all, it's quite refreshing to observe that Pinlinq, this new competitor in the payments terminal market is now not only stirring up the terminal-market but also the policy-market on payments (effectively challenging the policy dogma's of retailer representative organisations). Hurray for competition....