The excessive fees charged by Master Card from Merchants

Master Card should be ready to pay damages of $14 billion if the British Customer wins the case of fees charged by the network of a credit card were too high. The firm of law representing the case of customers said on Friday they filed the case with Tribunal of Competition Appeal in London in which damages of excessive fees will be charged.

The unlawful higher fees will be charged in billions by Master Card for its profit and to the damage of consumers. The former financial chief for the UK is the person who brought the case into the limelight on behalf of customers. It is the first step for the consumer’s compensation against Master Card.

This case was initially filed under the nation’s consumers Right Act of 2105. In this Act, the permission was given to the group of people to sue for damages happened to the group. It became the nation’s history in the business news.

One of the spokespeople of Master cards services said that they were against the claim made by the people. The charges at the case centre are called interchange fees which are the one component of swipe fees which represent the second highest cost for the businessmen who collect payments by the card. It was confirmed by Retail Federation of National Level which was a lobbying group of US.  The total fees of swipe average up to 2% of total purchase. But the consumers were not aware of this kind of information that the cost can be passed on to them by high prices of retail.

Education

This fee was the important cost for the group of retailers which was passed through the increased prices of services and products.

According to the MasterCard in old cases in the US, the customers lost their funds because interchanged fees have failed.

The statement was given by the spokesperson of the company that its charges were a cost of the business done.

As per the statement was given by the President of United Kingdom division of Master Card cash is the other option, but it is not a permanent solution.

The excessive fees charged by Master Card from Merchants

He said in his statement that shop must pay people to count cash and handle it before holding securely and transporting it to the bank. So it is considered as the basic cost of doing business.

Case II

MasterCard was ordered to pay damages of $69 against the case which was brought by the British Retailer in which it was said that company fees were interchanged which not competitive.  According to the estimation done this summer by MasterCard the total settlement was done with retailers went around $270 million.  The UK consumers trail is most probably starting in 2018.

The total damages demanded by the customers were genuine. But it was too quick to start driving losses to the MasterCard.  The total cash generation was $4 billion per year and was capable of borrowing from someone. The shares of MasterCard’s went down 45 cents and 0.5 % to $99 on Friday. The observation of profit gains up to 2.2%…

The Pros and Cons of Provident Fund

Today, the term Provident Fund typically means a type of fund that pays a lump sum to an employee at the time he or she reaches superannuation or alternately leaves the service of the company/firm he has been working in.

The provident fund (PF) consists of contributions made by both the employee as well as the employer. As a general rule, 4.5 percent of the employee’s take home salary is deducted at source while a similar contribution, not exceeding the amount paid by the employee, is paid by the employer. These contributions are on a monthly basis and the amount so procured is invested by the company. The total amount (i.e. the employee contribution, the employer contribution as well as the profit accrued from investments) is handed over to the employee either when he retires or when he leaves the employment of the company. As a general rule, this facility is available only to confirmed employees rather than probationary ones.

Pros

  • The PF accumulations of the staff member of the company earn interest (profit) on the employee’s contribution as well as on the amount that has been contributed by the employer.
  • Since Provident Funds are calculated on the basis of monthly running balance, their interest rates are updated far sooner than other fixed term mutual fund deposits.
  • Many companies allow their staff members to avail advanced partial withdrawals for medical emergencies, capital expenditure (such as house purchase or construction or vehicle purchase), marriage (self or offspring), or any other extenuating emergency and/or pressing liquidity concerns.
  • The full amount may be paid to all permanent employees when they leave the employment of the company.
  • In case of the death of the employee, the Provident Fund is payable to the surviving family members of the late staff member or any other individual as nominated by the deceased.
  • If the Provident Fund performs well over the years, the employee’s pension could be higher than what he would be able to acquire from a defined benefit pension fund once he reaches the age of superannuation.

Cons

  • The biggest disadvantage of a provident fund is that a chunk of the employee’s salary is deducted at source, i.e. he is paid a lesser amount than his salary. For example, if an employee has a salary of $100k per month and his monthly contribution is determined to be 4.5% then he will get only $95.5k per month with the remainder being deposited in his Provident Fund.
  • This type of pension fund is inherently riskier for the employee as he/she does not know for sure where and how the fund is being invested. This means that he /she might end up paying into the fund without even understanding how much of a risk his/her investment may have potentially incurred.
  • The company might go bankrupt along with the trustees of the fund and all investments of the fund may be foreclosed by the creditors.