An unusually worded press release emanated this week from Telstra in Australia titled “Customers can choose free options to avoid new billing fees; millions exempt.” But it’s not what I seems. In what can only be described as brazen by envious operators in many other countries, Telstra is imposing extra fees on customers depending on how they pay their bills!
One could be forgiven for thinking they were reading a Monty Python script with an opening line stating that Telstra had announced new bill payment fees and was ‘encouraging’ customers to act now to select bill payment methods that best suited their individual needs including fee-free options (or pay the penalty).
Under the changes, bill payment methods that incur lower costs for Telstra remain fee-free to all customers, while some bill payment methods that incur higher costs will incur the new or increased fees. Telstra also claims the bill payment fees are consistent with industry practice in Australia, and a quick check of Telstra’s competitors confirms this, but it begs the question where it is industry practice to charge customers extra for dutifully paying their bills in other parts of the world?
Commencing on 14 September 2009, Telstra will charge a A$2.20 (US$1.80) administration fee for each bill payment sent by mail or made in person at a Telstra Shop or Australia Post, unless an exemption applies. The existing credit card payment processing fee (yes, they already charge extra for paying by credit card) will increase to one per cent of the payment amount for MasterCard, VISA, and American Express and to two per cent of the payment amount for Diners Club, plus applicable GST.
All customers can pay bills ‘for free’ from a savings or cheque account via one of Telstra’s three direct debit options or via BPAY®, a direct debit system operated by banks in Australia. Thankfully, many of Telstra customers, including Telstra’s Pensioner Discount and Disability Program customers, will be offered exemptions from these bill payment fees.
Telstra Consumer Executive Director Jenny Young said Telstra would continue to offer a large range of bill payment options, including ones that did not incur fees.
“We encourage our customers to act now to put in place one of our free bill payment options to avoid the new or increased fees,” Ms Young said. “For those wanting to take up direct debit, we also have a special offer of up to A$50 cash back on a selected Telstra Shop purchase for customers who sign up to direct debit by 14 September 2009”. (Presumably that’s before they take A$2.20 off you for going all the way to their shop to pay your phone bill).
Ms Young also stated that, “Every year we spend hundreds of millions of dollars on billing, which includes processing bill payments, paying third-party billing service providers, answering customers’ questions about their bills and operating systems to support billing”.
Surely that has always been treated as a cost of doing business and it sounds as if Telstra is telling it’s customers that they should expect to pay for the privilege of being billed. It’s also a novel way of perhaps covering some of the reported overruns in Telstra’s billing systems rationalisation project. Ms Young does not elaborate how the fees are levied or accounted for as the extra fee would not appear on the original bill but would, presumably, be collected at time of payment.
“We’re introducing or changing our fees for some payment options which incur higher administration costs. However, Telstra will always be conscious of customers who are experiencing hardship.”
Ms Young said millions of people already took advantage of the ease and convenience of electronic payment options. No surprise with this sort of encouragement.
Telstra also launched a ‘public education campaign’, well ahead of the introduction of the changes but it may also need to move swiftly into a ‘public relations campaign’. Australia is set to become the envy of many other developed telecoms markets – no ‘all you can eat’ plans and charging for bill payments. It doesn’t get much better than this if you’re a service provider!