Article: Prepaid account interest adds up - but you won't see a cent

[ozbob]

From the Brisbanetimes click here!

Prepaid account interest adds up - but you won't see a cent

Prepaid account interest adds up - but you won't see a cent
Daniel Hurst
June 28, 2011

TransLink and Queensland Motorways could be generating millions of dollars each year earning interest on prepaid customer account credit.

A TransLink spokesman said 900,000 of the 2 million Go Cards handed out since the beginning of the smartcard rollout were still active, meaning they were used in the past three months.

With an average of $20 credit stored on each active Go Card, this would total $18 million in prepaid travel.

If the amount stored on the cards remained relatively constant throughout the year, TransLink could earn about $1.17 million in interest per annum based on the 6.5 per cent rate offered on bank saver accounts.

Tolling business Queensland Motorways confirmed about 1.4 million Go Via tags had been issued, but the number of Go Via accounts stood at 909,000, as customers could assign multiple tags to the one account.

The organisation refused to reveal the total amount of credit stored on customers' pre-paid toll accounts.

Go Via pre-paid accounts with the normal auto-top up feature are topped up when the balance falls to $10, meaning this amount is guaranteed to remain in Queensland Motorways coffers until the customer cancels the account.

If half of all accounts had the auto-top up feature, Queensland Motorways could rely on having at least $4.5 million of pre-paid credit in its accounts, potentially earning $295,425 in annual interest based on a 6.5 per cent rate.

If two-thirds of accounts were configured in this way, the pool of guaranteed cash would be at least $6.1 million, potentially garnering $394,000 in interest per year.

These figures cannot be verified because the organisations involved would not provide more specific account or interest details.

However, Queensland Motorways acting chief executive John Gardiner said any money it held on behalf of customers would be refunded if they closed their account and returned their tag in good condition.

"Any interest earned is part of general business revenue and helps offset what would otherwise be higher tolls," he said.

A TransLink spokesman said any revenue raised in interest from prepaid credit went "directly back into funding public transport".

Choice spokeswoman Ingrid Just said prepaid mobile, toll and transport accounts were part of modern society where convenience was important and technology was improving.

"We're probably becoming more used to the idea of holding accounts with a little bit of money in them to keep them active, which does soften the blow in terms of thinking [later] whether it's actually money well spent or not," she said.

"It is exactly like a gift card in the sense that you pay money in advance and if you don't use it in the certain timeframe or if it's in a year you might not get the same value out of it because of inflation.

"Like gift cards, you pay and get nothing in return [upfront] except for convenience and enjoyment and redemption down the track."

Ms Just said organisations must be transparent about such pre-paid products and it was up to the consumer to decide if the convenience was value for money.

Clem7 operator RiverCity Motorway, which operates Flow Tolling, refused to provide any comment.

Read more: http://www.brisbanetimes.com.au/queensland/prepaid-account-interest-adds-up--but-you-wont-see-a-cent-20110627-1gmki.html

[ozbob]

Blog comment:

In Canberra for example, the myway smart card 'The reusable MyWay cards can be recharged via autoload (direct debit) or by using BPAY, both of which will enable passengers to receive a 5% discount on their fares once the payment has been processed.'  Nothing like that on the go card, they just milk the money for extra revenue.  The failing fare structure for the go card (15% fare increases for the next three years on top of this years) is just more evidence of the contempt for the travelling public.  It is long past the time the fare structure for the go card was sorted.

[p858snake]

I wonder if someone could do a FOI request to get the info from translink....

[Gazza]

This article is stupid. Lets say you keep $50 on the card at all times and never let it drop (Not like me where I wait for triple beeps before reloading   ), by the end of the year, at current rates, you'd get $3.

Yay, I can go buy a KFC snack box with that sort of money!  

When issues like this get raised, it diverts attention away from the basics of PT like speed, frequency and reliability.
Wouldn't people rather have the interest money, which would be worth very little to individual passengers, combined, and put towards new services?

Edit: Commenters beat me to it and said it better than I could have.

When I think of the huge amount of money they could earn on the $4.17 balance of my Go Card going straight to government coffers my blood boils. What a rort! What a non-story!

VillageIdiot | Boganville - June 28, 2011, 8:24AM

I totally agree with Mum in Western Suburbs. What a joke! The cost of distributing the interest to every single go card holder would be more than the actualy amount of interest earned. Hang on, what about gift vouchers? Why aren't the retailers paying us the interest that could have been earned on our gift vouchers which aren't used immediately? Hang on, what about my annual newspaper subscription? I could earning interest on that money which has been outlayed?

OJ | Bris - June 28, 2011, 8:27AM

[#Metro]

I think this one was a foray into Courier-Mail style journalism... they'll quickly withdraw after being stung.
I've noticed that the Brisbanetimes and Courier-Mail readers seem to be different. I prefer reading the BT to be honest, CM is more for if you like scandals etc.

[mufreight]

This amount overall should be directed towards a better level and standard of customer service rather than just being soaked up by the Translink Hydra bureaucracy as would seem to be the case at this time.