1% on payments and Tobin tax

One Portuguese organisation for restaurants (ARESP) recently made some hubub about the fee that is taken on electronic payments, ie with your credit card. There is only two companies in Portugal that do that. ARESP claim that the payments (over 1% of each payment) is eating up too much of the profit margin of meny of its member companies. They wrote to one minister and has also been in contact with Spanish banks that only charge 0.5%. Found on the national edition of Metro Portugal 2007-01-16.

Which reminds of the Tobin tax. Although in the case above the money goes straight into the bankers pockets.

Which makes we wonder why so many that are against the Tobin tax tries to do that in practical terms. Just subtract 0.1 or 0.01% of the transferred money (only for trade in currencies) should be very easy to do, at least in practise. At least all money transfer of USD has to go via US banks, so there is control already because of US anti-terrorism tactics.

Instead of just make the world trade instable by quick and erratic currency trade some money could be funneled into something more useful like microfinancing. Best way out of poverty is trade, trade for the poor, by the poor.



At January 19, 2007, Blogger AEnima said...

well johan, you mention something that has always made me think... how much of this microfinancing does not actually translate into second order financing??? Because this market is turning poor people into homeless people here in the US... I've seen it happen with my own eyes all over! I'm really worried about this issue by the way.

At January 19, 2007, Blogger AEnima said...

oh, by the way, there are a lot worse capital controls in NTBs here. For example my bank, which is the biggest in america, charges me $40 flat fee for each international payment or money transfer plus a few % points of the total amount. Now... can you see what this amounts to everytime I want to pay small things like my annual or monthly quotas at the organizations I am affiliated with? Or if I just want to buy a CD from french amazon? grrrrrrrr

Also, a 1% tax is outrageous. In the US is 0.5% as well.

At January 19, 2007, Blogger Johan said...

i didn't know there were any microfinancing in the US. microfinancing in Portugal seems to be working ( i guess that is why one state agency (forget the name) seems so happy to support the idea, or so it says in the portuguese economy daily news papers, although one do not hear much about that recently.

what kind of businesses are microfinanced in the US? do they (the loaners) have a clear idea of how to handle the money and turn it into business? business planning? does not have to a 500 pages long bench marking report. 2-5 pages should be more than enough to make anyone think on what they need the money for and how make the best use of it ... i guess one can blame the bankers for not thinking straight also. take the example of the people that lent money to east timorese to buy taxis. worked fine when there were a lot of UN people around that could afford it but now when they are gone the taxis just rot away (that was before the internal turmoil started all over...).

ending up homeless? well, if people do not belong to (by choice or lack of interest from the state) a social security system (informal or formal) ... it is sad ...

why don't you put a large batch of money on a portuguese bank account? international swift /IBAN transfers are free of charge online, at least on CGD. there probably is % but i dunno how much it is.

40USD + % makes the actual interest rate quite horrendous!!! usually one would contribute such horrendous fees to a complete lack of competition ...

how come there are no interaction between the different amazons? i have been looking like crazy for a book in de and co.uk but fat luck. found plenty on com? although my password is the same for all, or rather if I change on one it is changed on all.

have you tried paypal? also takes a %


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