ATO (tax office) payments by credit card

[Deleted User]

Call me stupid, blunt and damn right arrogant...!

However my if the clowns at QEDRCC cancel my card for paying my taxes to ATO as I am required as a sole trader then its their loss I'm sorry. I put ~160k per year through this card including some business use so if they cancel my card it only proves they only want mums & dads customers with minimal spend... a rort in itself I think...!

Be careful here QEDRCC, not that I really count, but I am sure there are lots of people here on AFF using this card and would equate to many, many millions of dollars p.a easily being put through this card. At a minimum of 0.5% fee collected by QEDRCC for every dollar through this card, this would still be a nice little earner for QEDRCC/HSBC, so why complain (greed perhaps...?)

QEDRCC, you have a clear choice here, be a player in the credit card market, or not..... Ban me if you will....but it will be your loss not mine, you have one chance with me so please use it wisely...

 

[Moopere]

Its no use having a bit of a rant. These cards do get cancelled and at face value you'd think it was doing EDR more harm then good, both through bad publicity and simple loss of income.

There has got to be a reason why some institutions are dead set against business use ... I can't imagine, or even begin to fathom why. Perhaps I see it all too simplistically, but I would have though that more dollar spend = happy days given the % creamed from transactions.

 

[Deleted User]

Its no use having a bit of a rant.

No rant here Moopere...but my comment still does stand, all up to QEDRCC from here and if I'm toast with them then so be it...!

 

[sumthinfornuthin]

I think the the change with gambling is it will be treated as a cash advance and cop interest immediately and will not earn points and no interest fee period

 

[cove]

We lived through the Westpac Visa downgrade of points earning so we can handle other changes. I was surprised to read the ANZ thread where AFF members missed that Visa going off the rails about 3 years ago.
Right now Citi Business,JetStar,BankWest Platinum,HSBC,Qantas CU and Woolies EDR cards each have merit so you would just need to review and choose again if things start moving the wrong way.
Don't panic it is going to be OK!

 

[drross]

Wise words. So many choices

 

[AFY]

Hi
I put 80K BAS on Amex yesterday through ATO website for the first time.
It has not yet showed up on my Amex statement after 24 hrs.
Could someone please advise how soon will the charge show up on the amex statement?
I am a bit worry even I have printed the receipt fr ATO site. The payment is due on the 21/6.
Thanks

 

[cove]

It usually takes 2 to 3 days maximum to get posted. You should notice the amount of available credit has reduced immediately on your online account. Then when you pay the same thing happens where the posting of your payment takes a couple of days but you can use your card for more payments. The receipt is something you should keep.

 

[serfty]

Happened eariler this year to an AFFer:

http://www.australianfrequentflyer....worths-qantas-credit-card-canceled-36004.html

 

[KLN]

Yes, can concur with Cove, it will take a couple of days to catch up. did mine yesterday, and yes, it reflects on the totals and credit limit $$, but hasn't shown up as yet. it will work!!!!
and yes, home from the trip courtesy of the ATO!

 

[robd]

I'm up and running....

Got the limit increased on the biz cc yesterday, and just put through $12k to the ATO.

Yee hah .

Thanks for the great advice AFF.

 

[wafliron]

Call me stupid, blunt and damn right arrogant...!

However my if the clowns at QEDRCC cancel my card for paying my taxes to ATO as I am required as a sole trader then its their loss I'm sorry. I put ~160k per year through this card including some business use so if they cancel my card it only proves they only want mums & dads customers with minimal spend... a rort in itself I think...!

Be careful here QEDRCC, not that I really count, but I am sure there are lots of people here on AFF using this card and would equate to many, many millions of dollars p.a easily being put through this card. At a minimum of 0.5% fee collected by QEDRCC for every dollar through this card, this would still be a nice little earner for QEDRCC/HSBC, so why complain (greed perhaps...?)

I think that this may be the flaw in your argument unfortunately - I'm fairly certain that Visa/MC only collect a 0.33% surcharge on tax payments (the other 0.15% going to Optus for providing the payment gateway), and obviously part of that 0.33% is retained by Visa/MC themselves. No one here knows the cost of a QFF point AFAIK (or a Membership Rewards point, or a CitiRewards points, etc, etc), but I doubt (a maximum of) 0.33c is enough to cover it. I doubt even then full 0.48c would be enough. Ergo, I'm not so sure that the CC companies actually want our business when it comes to paying tax via our credit cards. I hope I'm wrong though :-|

Also, on the private health prepayments front, I just switched to Doctor's Health Fund and the most they would let me prepay was 12 months. Just a FYI in case anyone else here is with them.

 

[Moopere]

I think that this may be the flaw in your argument unfortunately - I'm fairly certain that Visa/MC only collect a 0.33% surcharge on tax payments (the other 0.15% going to Optus for providing the payment gateway), and obviously part of that 0.33% is retained by Visa/MC themselves. No one here knows the cost of a QFF point AFAIK (or a Membership Rewards point, or a CitiRewards points, etc, etc), but I doubt (a maximum of) 0.33c is enough to cover it. I doubt even then full 0.48c would be enough. Ergo, I'm not so sure that the CC companies actually want our business when it comes to paying tax via our credit cards. I hope I'm wrong though

Hmm. We've pondered this here in the forums before I think. I don't know the answer either, but the prospect that a card issuer is potentially losing money per transaction doesn't feel right to me. If true it would represent a massive unknown potential for loss, even inside their narrow(ing) focus of what a legitimate transaction might be.

Given that almost all credit card providers, and certainly the EDRCC, will spank you viciously for combinations of late payment or not clearing your account monthly, it really does appear to me that they don't encourage or want customers to have rolling balances.... so what could their ultimate business model actually be? Where is the money? Why would they entice points chasers with sign up bonuses only to face a loss each time transactions are made? Or it this a very narrow case of the merchant (ATO) having enough leverage to screw the card company back, whereas there are workable and decent margins to be made elsewhere? I can't imagine Woolies not driving a hard bargain ...

 

[wafliron]

Hmm. We've pondered this here in the forums before I think. I don't know the answer either, but the prospect that a card issuer is potentially losing money per transaction doesn't feel right to me. If true it would represent a massive unknown potential for loss, even inside their narrow(ing) focus of what a legitimate transaction might be.

Given that almost all credit card providers, and certainly the EDRCC, will spank you viciously for combinations of late payment or not clearing your account monthly, it really does appear to me that they don't encourage or want customers to have rolling balances.... so what could their ultimate business model actually be? Where is the money? Why would they entice points chasers with sign up bonuses only to face a loss each time transactions are made? Or it this a very narrow case of the merchant (ATO) having enough leverage to screw the card company back, whereas there are workable and decent margins to be made elsewhere? I can't imagine Woolies not driving a hard bargain ...

It doesn't make sense to me either, but I can't find a gaping hole in my logic :-|

Regardless of the split between Optus / Visa/MC / card issuer, we know that there can't possibly be any more than 0.48c per $1 charged in direct revenue for the card issuer (and of course it will be less than that). That measly 0.48c has to pay for whatever rewards program they're offering their customers (not to mention all their operational costs), and if it's one of the more generous FF-point-based ones I just can't see how 1+ (insert airline program here) point could cost less than 0.48 cents.

Thinking about it, I see three possibilities:

1) I'm entirely wrong and it's making them money directly on every transaction - the tiny surcharge is, in fact, enough to cover the costs of points + operational costs. Personally I feel this is unlikely due to my estimated cost of rewards, let alone operations.

2) There's a (high?) degree of cross-subsidy going on - the majority of (or at least enough) customers paying tax via any given CC are redeeming their points for "cheap" (non-airline) rewards, are earning the card issuer lots of additional revenue through interest / late fees / whatever, etc, that the card issuer is making money on these transactions overall. And hence whilst they'd love to stop those of us who redeem for the high-cost rewards, pay our balances on time, etc, from paying tax on CC and costing them money, they can't ban / devalue it at the "card product" level or they'd cost themselves money overall. I'd rate this as a distinct possibility - it's perhaps the most reasonable explanation in my view, although I do wonder if it really can stack up in the case of particularly high-rewards-earning (and hence costly to the card issuer) card products - which also tend to be the cards used most for paying big tax bills, at least based on the AFF audience.

3) It's costing them money in all / almost all cases - the tiny surcharge rarely (or never) covers the cost of points / rewards + operational costs, but corporate inertia / lack of realisation of this problem / not wanting to "move first" and piss off or lose customers prevents the card issuers from acting to fix it. I'd also rate this as a reasonable possibility, although it's certainly the option I "most hope" I'm wrong about as it implies eventually we'll lose this wonderful benefit.

Or it this a very narrow case of the merchant (ATO) having enough leverage to screw the card company back

I don't think it's not the ATO specifically, I think it's the government as a whole. A list of merchant categories and fee amounts that I saw recently (from one of the major banks) showed a "government" category with a 0.33% fee - that's where I got 0.33% from in my earlier post, and it makes sense given the sort of margin you might expect Optus to charge, not to mention the fact that the VIC Office of State Revenue charges exactly 0.33% surcharge for any CC payments you make with them (and they don't use an outsourced payment platform AFAICT).

 

[Deleted User]

Hmm. We've pondered this here in the forums before I think. I don't know the answer either, but the prospect that a card issuer is potentially losing money per transaction doesn't feel right to me. If true it would represent a massive unknown potential for loss, even inside their narrow(ing) focus of what a legitimate transaction might be.

Given that almost all credit card providers, and certainly the EDRCC, will spank you viciously for combinations of late payment or not clearing your account monthly, it really does appear to me that they don't encourage or want customers to have rolling balances.... so what could their ultimate business model actually be? Where is the money? Why would they entice points chasers with sign up bonuses only to face a loss each time transactions are made? Or it this a very narrow case of the merchant (ATO) having enough leverage to screw the card company back, whereas there are workable and decent margins to be made elsewhere? I can't imagine Woolies not driving a hard bargain ...

Very well written...I agree 100%

If I get banned by this mob then C'est la vie, as this mob are on a knife edge when using them...

Time to start preparing and looking for a QEDRCC alternative for when my time comes

 

[diningdecadence]

I'm guessing a good start would be a transactors vs revolvers discussion, although I suspect most, if not at all, on this thread are transactors.

Another suggestion- potential liability regarding chargebacks? Although presumably they are data mining our info enough to rate the ATO as a fairly secure merchant!

 

[Moopere]

Personally, I reckon its either this:

1) I'm entirely wrong and it's making them money directly on every transaction - the tiny surcharge is, in fact, enough to cover the costs of points + operational costs.

or this:

2) There's a (high?) degree of cross-subsidy going on - the majority of (or at least enough) customers paying tax via any given CC are redeeming their points for "cheap" (non-airline) rewards, are earning the card issuer lots of additional revenue through interest / late fees / whatever, etc, that the card issuer is making money on these transactions overall. And hence whilst they'd love to stop those of us who redeem for the high-cost rewards, pay our balances on time, etc, from paying tax on CC and costing them money, they can't ban / devalue it at the "card product" level or they'd cost themselves money overall. I'd rate this as a distinct possibility - it's perhaps the most reasonable explanation in my view, ....

I'd like to think their model is #1 above. Slim margins, sure, super slim, but essentially making money at every ka-ching.

However, hand on heart, it seems more probable that #2 above is closer to the truth. Cross subsidy. There is an inherent value in training customers to use their credit card for everything (that you want them too) and no-one wants to become Amex in this regard ... by that I mean, a known problem of only a percentage of business acceptance. The perception, at least in Australia, is that VISA/MC works _everywhere_ and its probably darn important that this perception is maintained.

Having said that though, why not simply plonk government merchants into the same category as gambling? ie; it gets treated as a cash advance? Card acceptance is still maintained but without the pesky rewards payouts.

There is definitely some rather fishy behind the scenes business going on I think. WOAG would appear to be laying down the law, which is totally fine. Their leverage is that the public has to find a way to pay, CC acceptance or not, we must give to Caesar that which is Caesars So, the card companies are invited to participate, but the charge is capped at a pretty low level ... and thus the games begin. Amex's recent drop of reward returns, from 1MR point / $ across many of their cards to 0.5 MR point / $ does smell an awful lot like the inevitable conclusion to a fixed payment cost hitting the reality of rewards/processing cost.

Perhaps the ban on so-called "business" CC charging is no more than a way to stop people paying the government via CC? Business charges to government bodies can be enormous, and if the return is 0 or negative then the cross subsidy with other more lucrative merchant fees (small businesses with no leverage for instance) will hurt the whole model?

I really don't know .. its all conjecture from my end. My business dealings are by and large pretty straightforward. If a customer is nett negative, then we'll let them go at the next reasonable opportunity and put more resourcing into the nett positive customers and the finding of new customers. Not a whole lot of cross subsidy going on where I work

 

[AFY]

Thanks Cove.
The BAS payments appered on the Amex statement this morning. That's good.
But got the message to call Amex re credit card issue while I was away from office.
Hope it has nothing to do with the ATO payment. There were 10 payments of various amount.
Will find out tomorrow.

 

[Dyslexic traveler]

I have been doing credit card payments for my tax for some time non, it's a great way to rack up points. The first time I did it I put over 130 K on the card and let me tell you I did get that call from Amex askin me about my spend, my replie was that if I pay $4500.00 per year for a card they can wait till I defalt before calling me and that was the last time they called.

 

[cove]

It is not unusual for a credit card company audit/fraud section to call when a substantial payment goes to the ATO. Generally they want to identify you and ascertain that the amount being paid was really you paying.
After a few months with regular payments going on your card these calls tend to stop.
we always thought that it would be strange for a fraudster to use your card to pay their tax.