here&now

Woolworths reducing card choice

Members – and millions of other Australian consumers – should be aware of a move by Woolworths to restrict the use of Visa Debit cards across their retail empire later this month. From 15 April, Woolworths’ outlets (which include Big W, Woolworths Supermarkets, Safeway, BWS, Dan Murphy’s, Dick Smith and Tandy) will start banning customers from selecting the ‘credit’ option when using a Visa Debit card to pay for their purchases.

Millions of Australians use Visa Debit cards to help minimise transaction fees and all Savings & Loans members currently receive unlimited free ‘credit’ purchases using their Visa Debit card. By only allowing Visa Debit card users to select ‘savings’ or ‘cheque’, Woolworths will be forcing many of its customers to pay extra to buy their groceries.

Without getting too technical, Woolworths will only process Visa Debit purchases through the EFTPOS network, of which it is a part owner. The move not only limits consumers’ choice, but also works out better financially for Woolworths.

Woolworths – one of Australia’s biggest companies – is using its market dominance to tell you how to pay for your shopping.

If you haven’t used one before, a Visa Debit card gives you all the convenience of a traditional credit card, but using your own money. This means that you can use your card to buy things online, over the phone and to buy your groceries (at least, anywhere that isn’t owned by Woolworths after 14 April). It’s a great way of giving people access to their money however they want it, without the risk of going into debt.

The ban only extends to Visa Debit cards, not credit cards. Woolworths has previously launched its own credit card, which will also not be affected by the ban.

There isn’t much we can do to change Woolworths’ decision, but there are a few ways to avoid any fees for using the ‘savings’ or ‘cheque’ option with your Visa Debit card:
• Withdraw money from a rediATM before going shopping – there are over 3,200 rediATMs around Australia
• Think ahead – if you have to use ‘savings’ or ‘cheque’, take some cash out so you don’t have to perform another transaction
• Consider taking out a Visa Credit card – this isn’t the right option for everyone but interest free periods are available and you can ‘pre-load’ the card with your own money if you’re worried about credit cards

We’re working with our industry group to help ensure that Australia’s payment system remains fair and our members can continue using their money however they want to.

A rocky year comes to a close

I don’t think anyone could argue that 2008 has been a tough year for many people and businesses. A series of events on the other side of the world sent shockwaves through us all and we realised just how interconnected world economies are.

Australian financial institutions were able to weather the storm better than most, though we were certainly impacted by what’s become known as the GFC – or ‘global financial crisis’. I’ve talked about it many times before and it’s almost certainly to be what 2008 is best remembered for.

Savings & Loans would have had an interesting and busy year even without the global economic conditions we’ve faced. We merged with Austral Credit Union a few months ago, launched a new program to support young carers in the community, opened new branches, introduced a new fee structure and launched some exciting new products. At the same time, I’m happy to say that we continued to keep our members’ interests our first priority.

Things are going to be tough for the next few years due to the GFC, but Australian financial institutions – especially Savings & Loans – are still in a strong position. Having said that, things won’t be as easy as they have in the past. Belts will be tightened and we’ll need to become more efficient, but years of strong performances have given us sizable reserves and a stable base to work from.

On top of this, the Federal Government’s deposit guarantee gives an extra layer of protection to the financial system – one that I don’t ever think will be used, given the rigorous legislation surrounding the sector.

So there we have it – a realistic view of what we can expect to see in 2009 and beyond. We will become more efficient, but our commitment to member service and value will never change.

This is my last blog post for the year as I’m taking some time off over the next couple of weeks. Have a great festive season and I’ll be back after the New Year.