Cricket Wireless still has a convenience fee similar to the one that VZW scrapped. Interestingly, they don't charge a convenience fee if you make the payment in person at one of their stores.
Logically, it would seem that making a payment via phone or their website would save them labor costs, but the cynic in me tells me that they're charging the fee because through those channels they don't have an opportunity to put a live salesman in your face to sell you high-margin accessories.
I happen to work in the cash payment industry with wireless providers being a large (but shrinking) part of our customer base. These convenience charges are commonly used in the case where a third party merchant is accepting the payment from the individual on behalf of the provider - and that fee is where the merchant gets paid from.
As I see it, that's reasonable - because it truly is a convenience to the customer (who would otherwise need to travel to a provider-owned store to make cash payments). The dirty secret here is that the wireless provider also gets a sizable cut of the convenience fee, with the payment network (where I work) getting a (typically) tiny piece. IOW, the provider does very little to nothing in the transaction and often gets the biggest slice of the fee, in addition to (typically) the full amount of the transaction. It all varies, and depends on complex contractual relationships between provider/payment network/merchant - but it basically amounts to "we're bigger than you, and if you don't want your competitor to get our business instead, we're going to get as big of a cut of that fee as you can afford".
Somewhere along the way, the wireless providers got the bright idea that it was a good idea to have convenience fees for payments that don't involve a third party or payment network (*). Padding the bottom line, in other words.
(*) It actually can be more complex than this as in some cases "company stores" are independently operated franchisees, or other complexities exist. Suffice it to say that what I described above is the typical case in the industry. I also should point out that while I'm familiar with VZW's practices first-hand, my employer no longer has a direct relationship with them - for which I am eternally grateful, because they are a MASSIVE pain in the fucking ass to deal with.
Logically, it would seem that making a payment via phone or their website would save them labor costs, but the cynic in me tells me that they're charging the fee because through those channels they don't have an opportunity to put a live salesman in your face to sell you high-margin accessories.
I happen to work in the cash payment industry with wireless providers being a large (but shrinking) part of our customer base. These convenience charges are commonly used in the case where a third party merchant is accepting the payment from the individual on behalf of the provider - and that fee is where the merchant gets paid from.
As I see it, that's reasonable - because it truly is a convenience to the customer (who would otherwise need to travel to a provider-owned store to make cash payments). The dirty secret here is that the wireless provider also gets a sizable cut of the convenience fee, with the payment network (where I work) getting a (typically) tiny piece. IOW, the provider does very little to nothing in the transaction and often gets the biggest slice of the fee, in addition to (typically) the full amount of the transaction. It all varies, and depends on complex contractual relationships between provider/payment network/merchant - but it basically amounts to "we're bigger than you, and if you don't want your competitor to get our business instead, we're going to get as big of a cut of that fee as you can afford".
Somewhere along the way, the wireless providers got the bright idea that it was a good idea to have convenience fees for payments that don't involve a third party or payment network (*). Padding the bottom line, in other words.
(*) It actually can be more complex than this as in some cases "company stores" are independently operated franchisees, or other complexities exist. Suffice it to say that what I described above is the typical case in the industry. I also should point out that while I'm familiar with VZW's practices first-hand, my employer no longer has a direct relationship with them - for which I am eternally grateful, because they are a MASSIVE pain in the fucking ass to deal with.
