Examination of Witnesses (Questions 220-239)
MR JOHN
HARDY AND
MR HOWARD
AIKEN
21 DECEMBER 2004
Q220 Angela Eagle: Just stop the sentence
there. I do not think they do have a social conscience! The threat
to the rest of the free cash system is real though, is it not,
with the dynamics of the growth of this market?
Mr Hardy: No, I do not think it
is.
Q221 Angela Eagle: Do you not think it
is conceivable that free cash machines will be unavailable for
the rest of us potentially in the next few years because of the
dynamics of this market?
Mr Hardy: I think that is extremely
unlikely.
Q222 Angela Eagle: Why?
Mr Hardy: The number of free machines
has actually increased.
Q223 Angela Eagle: Very, very slowly
though.
Mr Hardy: But we have already
indicated that the free machine market is essentially mature and
that the charging machine market is immature and is growing and
is providing convenience.
Q224 Angela Eagle: So what do you think
about HBoS which just sold off most of its free network to a charging
operator?
Mr Hardy: That is entirely a decision
for HBoS and whoever bought the machines.
Q225 Angela Eagle: Does this not show
the dynamic of the market that is now being created and is that
not a threat to free cash machines?
Mr Hardy: It shows the market
dynamic.
Q226 Chairman: But it is outwith your
remit.
Mr Aiken: We cannot insist people
put machines in at all, let alone free machines, and we cannot
regulate the charge.
Q227 Angela Eagle: You said earlier that
you have 40 or 41 organisations and they were all competing institutions
but you failed to mention that certainly Hanco is mainly owned
by a bank, so there is some overlap there, is there not?
Mr Hardy: Hanco was an independent
deployer in the sense it was owned by Hanco until earlier this
year—April or May I think, I cannot remember—when
it was bought by the Royal Bank of Scotland, and that is for the
Royal Bank of Scotland to answer.
Q228 Mr Beard: Who have sold off their
machines to it.
Mr Hardy: No, they have not.
Mr Aiken: I am not aware of any
machines—
Q229 Chairman: —That is HBoS.
Mr Aiken: That was their decision
but I am not aware that any have moved.
Q230 Angela Eagle: So it is certainly
possible and we have got one example there whereby some of the
members of your board actually have a big interest in the independent
deployers as well as having their own networks, so it is not
40 organisations competing against each other, is it, some organisations
are owning each other?
Mr Hardy: There is only one example
of that.
Q231 Angela Eagle: So far.
Mr Hardy: Yes.
Q232 Angela Eagle: But that is conceivably
something that could increase?
Mr Aiken: I think that is something
you would have to ask the institutions concerned. It is not for
us to answer what their opinions might be.
Q233 Angela Eagle: Just one final question.
If we wanted to look at how all of this worked for regulation,
it is the OFT that we would have to talk to, is it, because they
are your regulator effectively?
Mr Aiken: Competition law is our
regulator, yes, and the Office of Fair Trading decision is a public
document. It is on the Office of Fair Trading web site which is
obviously available to anyone to examine.
Q234 John Mann: Just one question. I
was just reflecting on your 14 point print size on machines. I
wonder how easy you could read 14 point.
Mr Aiken: We said that is a minimum.
John Mann: I wondered whether you could
read the 14 point. I have made it easier and crossed off everything
else and I have put a big star rather larger than 14 point. That
is the 14 point.
Chairman: What one? Let me try again!
John Mann: The one I have not crossed
out is 14 point. I wondered whether it might be necessary to actually
go rather close up to the screen, perhaps get in the queue at
the cash point to queue up to check whether one could work out
where the 14 point print was and whether something a bit larger
might be an appropriate size?
Mr Plaskitt: How about making that font
the minimum?
Q235 John Mann: So the consumer could
make a competitive choice rather than be struggling up at the
screen to find this small print saying we will be charging you.
Mr Aiken: As I said, that is an
absolute minimum size. What we have said is that the font size
must be commensurate with other—
John Mann: —Perhaps you could take
that back to your board as well and they might want to reflect
on whether the 14 point size is quite large enough or whether
something rather bigger might actually encourage competition.
Q236 Chairman: Thank you, John. The Banking
Code is a voluntary code and all your members are included in
that but subsidiaries of companies are not included. Is that correct?
Mr Aiken: In LINK terms, we have
a set of LINK rules and these things that we talked about on signage
are rules, they are not a Code of Practice, so anyone who participates
in LINK is bound by those rules.
Q237 Chairman: We will maybe come back
to that. Mr Hardy, on this issue of transparency and the petrol
stations with machines, are there any technological or systems
barriers that would stop issuers clearly indicating the amount
of charge in the way that consumers can see before inserting their
cards?
Mr Aiken: There are no real systems
barriers to that other than that the charge may in some circumstances
be variable if for example members went to an ad valorem
charge.
Q238 Chairman: You have said it is difficult
to provide up-front notice of the charge of the card issuer—for
example, the credit card company may issue a charge—but
is it ever likely to be below £1.50? What I am getting at
is this: would it not be possible to put a sign on the machine
saying you will not be charged less than so-and-so for using this
machine, in other words a minimum payment, and that would make
it easy for everyone?
Mr Aiken: You would not know—
Q239 Chairman: Mr Hardy is indicating
you could do that.
Mr Hardy: You could do that. There
might be some circumstances in which there might be issues with
that.
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