The very first blog I ever wrote at this blog address was about phone and mortgage companies and the fees they charge. Phone companies and banks basically. (here is a link to that blog). I talked about the fees changed by phone companies in particular in my book the Syncverse. I posted on my other blog in 2007 that the internet would explode when there was easy access to broadband data at home (it did). I think the next big step in the process is the reduction of the fees charged by various businesses.
Banks make more money on the fees they charge than anything else. It is kind of scary. Phone companies make money on data movement. Lots of money on data movement. That is also scary. The reality of both the economy and the growth of the economy are living in a world of fees. A house with all sides charging cannot stand. (sorry Mr. Lincoln).
Banks have the right to charge fees, after all they like phone companies are providing a service. What concerns me is the nature and amount of the fees charged. In the 2006 time period there was a huge up swing in what has later been dubbed predatory lending. In the past couple of years a number of phone companies and banks have been sued (and the plaintiff won) regarding these fees changed.
It is not a bandwagon I am jumping on because I want to. I actually see these two problems as impact two huge areas.
- The economy
- The growth of technology
My argument for the first is as follows:
First off fees charged for the following are excessive
Overdraft and insufficient funds. Given that the bank has access to your personal banking and employment records changing a fee when you go slightly upside down on the Thursday before you get paid is truly ridiculous. Secondly while it costs the bank money to hold checks against pending funds it does not cost them 35 dollars per incident (I made a mistake last month and paid a bill a day earlier than I thought I did, which cause me to have insufficient funds for 2 checks. So they changed me 70 bucks.)
Data transfer and movement fees. Seriously like overdraft fees these are overkill. It doesn’t cost the phone company more than 30 cents to move data across the country. IT doesn’t cost a penny more to move data from Canada to the US. For that matter it does cost a little emote to move data between the US and Europe but not 1.50 or more. In fact if you look at where phone companies are making massive amounts of money it is in two places, Long Distance calls to other countries and data movement both within the country you live in and between any two or more countries.
Those two fees alone are ridiculous. Excessive and predatory in the end. It makes me want to move to a credit union. Why? because they don’t charge the outrageous fees banks do. Don’t even get me started on the ATM costs. Yes banks charge other banks an ATM fee (if you are a customer of bank A and use the ATM of bank b, bank b change bank a, bank a charges you and adds a little extra you know because after all they get no value from having your money.).
My last argument is the growth of technology and the overall impact these fees have. First off, there are companies that exist in this new economy that change flat rates. They are not however telephone companies that have major footprints. The world of fees remains one where the phone companies are profiting heavily and that actually slows the expansion of cloud and CPS usage. If it costs too much, it is something companies don’t take on.
It is a simple argument. I’ve used it for years working with partners. Don’t make all your money on one deal. If you do, then you are bound to that deal. It means your company can easily be lost. The day of fair fees is coming.
Futurist and Anti-Fee poster since 2009.