Some shops to lose SCB card swipe machines?

Standard Chartered Bank (SCB) has notified some retail outlets that it was removing its credit card swipe machines.

It was unclear as of press time yesterday why the bank was withdrawing the machines from some of its merchants, although some retailers interviewed by The Brunei Times speculated that it may be due to the shops' declining credit card transactions.

The Brunei Times contacted the bank about the matter yesterday. The bank will release a statement soon.

Abdul Latip Isnin, general manager of Giant, confirmed that he has received the notice from SCB and that the removal of the devices would take place in November.

Asked about the reason that was stated in the letter, Abdul Latip said that the bank wanted to "concentrate on different areas".

The removal of the swipe machines should not affect Giant's business as consumers would still be able to use their SCB credit cards on the other machines provided by other banks, he said.

A furniture store owner who has received the SCB notice said, "Reading between the lines, it could be that we are not valuable enough as a customer."

He added that one possibility could be that the volume generated by SCB credit cards are not enough for each merchant to retain the bank's swipe machines.

He also ruled out any adverse effect the removal of the machine could have on his business.

"As a small business, I think I have too many machines," he said.

Ramesh Jiwatram Bahwnani, owner of YMRM Company, said that he has not received the SCB notice yet but would soon be meeting with the bank as he has heard of the development regarding the credit card machines.

"I'm not sure about whether they will withdraw the machines from all the merchants or just some of the merchants, but in my own opinion, as a supporter of the bank, I feel they should keep the machines with the retailers," said Ramesh.

"It is possible that they want to reduce the costs of maintaining the machines and repairing them, but that would be a decision that would be up to the bank at the end of the day," he said.

One possible reason for retracting the machines could be that based on the decrease in credit card transactions year on year, and that it can be felt with most companies especially during the Hari Raya month.

"If you are talking about a couple of months before the Hari Raya period, then we have had a slight increase year on year, but after that it actually went down. I can see that our business went down between 10 and 30 per cent, and this is for all textile and furniture companies," he said.

"This is possibly the worst year that any merchant has seen in a long time in Brunei, and it's a 'one hit, multiple effect', so this is possibly how the banks will want to sustain their business," he said.

"One of my suggestions that banks could do, to help with sustaining the economy, could be to delay the credit card payments just for a month, or for a little while, because by doing that the economy moves, suppliers move, retailers move and the market moves," Ramesh said, referring to the Brunei government's new and more stringent credit card directives that went into effect this year.

Ramesh said it was his own opinion, merely a suggestion. "I'm not saying that they should cancel the payments, but just delay it," he said.

For every dollar's worth of transaction that is swiped on the credit card machine, a percentage of that sale would be paid to the bank as commission, said the furniture store owner.

"To my knowledge, if one bank swipes its card on another bank's machine, they would have to pay a commission to the other bank, and we would also have to pay commission to the bank for the transaction (swiped on the machine)," he said.

The Brunei Times