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.

Transaction fee changes

It's Greg Connor, Savings & Loans' CEO here.

Over the next week or two all Savings & Loans members will receive a letter advising of changes to our transaction fees. There are a number of changes to our fees, including some increases and adjustment of the qualifying criteria for different membership categories. We’ve also introduced a new membership category, known as BaseMember.

All of the changes will be explained in the letter you’ll receive, along with information on our Platinum membership option and Easy account, which can help you cap transaction fees through Savings & Loans channels.

The new fee structure balances the financial needs of the Credit Union – and our obligation to remain strong to best serve our members – and enabling members to transact without excessive fees.

It’s not possible to discuss every member’s questions about our new fee structure through the blog, as there are a lot of factors that determine which membership category you fall into. Your fee category is determined by the kind of products you have with us and the balance of your accounts, and this isn’t the right forum for discussing these personal matters.

If you’d like some more details on the fee changes or some help working out which fee category you’ll now belong to, visit savingsloans.com.au/yourmembership

If you’re still unsure about what the changes mean for you, contact us online, call 13 11 82 or drop into your nearest branch.

You can leave feedback through the comments box below, but please be aware that comments won’t be published on this post.

Greg

What is direct charging?

I'm Jason Cameron, Savings & Loans' senior manager of Product and Research. Among other things, my job involves developing the products we offer our members - things like the types of loans we offer, the features of savings accounts, etc.

From today, there are changes to the way ATMs are used and operated in Australia with the introduction of ‘direct charging’. You may have seen some media articles about the changes, most of which focus on the possibility of fee increases rather than the positives for consumers.

In a nutshell, the introduction of ‘direct charging’ means that you’ll have greater control over how much you pay for using an ATM.

Here’s how the system works at the moment:

• A Savings & Loans member uses a non rediATM or ‘foreign’ ATM (for example, one owned by another financial institution or in a hotel)
• The ATM owner charges Savings & Loans for our member’s use of the ATM
• Savings & Loans charges our member $2 to offset the charge to us

And here’s how things will work from today:

• A Savings & Loans member uses a non rediATM or ‘foreign’ ATM
• After the member enters their PIN and selects the transaction they wish to perform, a message on the screen will tell them how much the ATM owner will charge for the transaction (known as the ‘direct charge’)
• The member then has the option of paying the fee or cancelling the transaction at no cost
• If the member proceeds with the transaction, the direct charge will be incurred and Savings & Loans charges 50c to cover the cost to us of processing the transaction
• There will be no standard direct charge fee for using a foreign ATM – it will be up to the owner of the ATM to decide the fee for using any particular machine

So the changes actually give consumers more choice and control over how much they pay in ATM fees.

I don’t think we’ll see any big changes to how much people pay to use an ATM. Importantly, it has let us reduce our non rediATM fee from $2 to 50c.

The most important thing to remember is that these changes only apply to foreign ATMs. If you’re a Savings & Loans member then you have access to over 1,300 rediATMs without incurring any direct charging fees (of course, your fee category and other usage will impact your transaction fees).

If you haven’t already noticed, ATMs branded with the Savings & Loans name and logo are being replaced by rediATMs. This will make it simple for our members to know which ATMs they’ll be able to use without being impacted by direct charging.

Credit unions are working together to expand the rediATM network, especially in areas where there isn’t a great deal of choice. If you don’t have a rediATM near you, either at home or when out and about, here are some other ways to keep fees low:
• Use EFTPOS to make a purchase and get some cash out at the same time. Some retailers even allow cash withdrawals via EFTPOS without a purchase of goods.
• Pay with your Visa Debit or Visa Care Card and select the ‘Credit’ option.

Credit unions around Australia will be adding more rediATMs over the coming months, so keep an eye on the Savings & Loans website for locations.

UPDATE

We have reviewed the non-rediATM fee and will reduce it further, to 25c per transaction, from 11 March.

Transaction fees come under review

If you’re a Savings & Loans member then in the next week you will receive a letter explaining some changes to our transaction fees. While there has been a slight rise in some fees, others have decreased and our members still have access to some of the most affordable banking in Australia.

Visit our website if you’d like to see the details of our new fee structure and see which ‘category’ you fall into.

It’s been almost five years since we’ve reviewed our fee structure and there have been some significant changes in the marketplace since then. Particularly in the last 12 months, we’ve seen our margins – the difference between the interest rates we receive for borrowings and pay for deposits – decrease substantially, placing pressure on our bottom line.

While we don’t exist to make profits for external shareholders, we do need to make money in order to stay viable and best serve our members. The profits that we do make – which are far from large when compared to some other financial institutions – are invested directly back into Savings & Loans, helping to open new branches, increase services and offer our members superior value.

While most of the changes to our fees are relatively small, there are a few things I want to point out:

Expanded range of ATMs – All Reditellers around Australia will now be treated as Savings & Loans ATMs. That means people in our ‘MemberPlus’ category will be able to use more than 1,250 ATMs for free, while those in our ‘Member’ and ‘Member23’ fee groups will have just $1 taken from their monthly allowance for using a Rediteller ATM, down from $2 previously.

Platinum membership – I know that everyone likes to manage their accounts differently, so we’ve introduced ‘Platinum’ which gives you unlimited access to your accounts using Rediteller ATMs, EFTPOS, Visa, direct debits and Savings & Loans branches, along with other benefits. For more information on Platinum membership, visit the fees page on the Savings & Loans website.

Monthly fee on Visa cards – This is one of the biggest changes to our fees, and something we’ve thought long and hard about. It’s the first time we’ve had any sort of annual or monthly fee on our Visa cards. At $2 per card per month, it’s still one of the lowest fees in the market.

As I said, more information on the fees is available on the website.

None of our fees are hidden, and we like to be open about the reasons for increasing fees. If you have any questions or comments about the new fee structure, I’d like to hear from you.

Greg

Counting the benefits

You may remember a post last year about a trial of a coin counting machine in our Flinders St branch, and how it’s saving our members time and money.

Members who have used the machine have given us some great feedback, and we've been asked by members using other branches to add expand the number coin counters we have.

The trial was so successful, and the feedback so positive, that we’re installing another 10 of the machines in the next couple of months. Our Windsor Gardens, Salisbury, Christies Beach, Modbury, Mt Gambier and Elizabeth branches will have the machines installed this month, with four more branches to follow soon.

The machines count coins at a rate of up to 2,500 per minute, which can save you (and our Service Consultants) a lot of time. And because our staff don’t have to weigh or count the coins, you don’t have to pay a coin handling fee.

Instead of counting coins into bags and then taking them to a consultant, you can pour all of your coins into the machine, which will determine their value and give you a receipt. You then take the receipt to the teller desk, and we deposit the money into your account

Watch out for the machines in branches.

Cheers

Greg