British Telecom altered its pricing structure in May of this year.
Prior to this change, a customer who paid his bill by Direct Debit was given a discount of £3 per quarter on his line rental. Now, all customers pay the same line rental but non-DD customers are charged an extra £4.50 per quarter. This appears on the bill as a separate item with the legend Payment Processing Fee - £4.50. There are exceptions to this rule but the vast majority of non-DD customers must pay this additional sum.
On querying this fee with BT, I received a reply which attempted to justify the £4.50 charge by claiming that (1) greater costs accrued to processing payments made by other means than Direct Debit and (2) that “on average, customers are more likely to forget to pay or not pay, and this leaves us with a bad debt of around £100 million a year”.
Regarding point (2) I don’t see why I, and other good but non-DD payers, should subsidise forgetful or bad payers. I’ve been a customer of this company for 24 years and I always pay on time. For the past 7 years I have paid online via the BACS transfer system. That is an issue I intend to press home to BT.
On point (1) I call bullshit. I can’t see how the costs associated with receiving online payments can be greater than the costs associated with receiving payments via Direct Debit. Every quarter a bill is produced and a debit sits on my part of the database. Whether I pay by DD or by online transfer my credit cancels this debit, the amount owed is now zero and the account is not flagged because everything is normal.
Of course I may be wrong about this so I’d like to know, on average, what is the actual cost to a supplier for processing a payment made by (a) online transfer (b) cheque © debit card and (d) credit card.