President of the Consumers Association of Singapore Yeo Guat Kwang said that Nets was able to increase fees without consideration for small merchants or consumers precisely because it has a monopoly on the market.

There are six million Nets users, 13,000 Nets merchants and 30,000 Nets transaction points nationwide.

And, Mr Yeo pointed out, eight of 10 neighbourhood retailers offer Nets as their only non-cash mode of payment. This far exceeds the reach of any debit or credit card player.

'What other alternative do they have? It's like a monopoly; retailers have no choice but to accept it,' he said.

Nets, or Network for Electronic Transfers, is raising its transaction fees for retailers in three batches starting July 1 - the timing of which has also come under fire because it coincides with the 2 per cent goods and services tax hike.

VIDEO No to Nets fee hike, say most S'poreans The recent announcement of a fee hike in Nets transactions by July has sparked furore among businesses and consumers.  (2:21) Nets fee hike The rates that merchants will have to pay for each transaction will go up three-fold. Merchants have said that they will have no choice but to pass on some of the cost to the consumers. Take Poll | View Results

The rates will go up from the current 0.35 and 0.55 per cent of purchases to between 1.5 per cent and 1.9 per cent - this represents an up to three-fold increase in the amount merchants will have to pay for each transaction.

Merchants have said that they will have no choice but to pass on some of the cost to the consumers.

Mr Andre Johns, 40, who runs an audio equipment and home security devices shop in Sim Lim Square, said: 'Already, we are seeing customers coming in and asking if they can get a better price by paying cash. That has never happened before.'

Mr Yeo also fired Nets for not considering the poorer consumers, who may not have the means or knowledge to apply for credit or debit cards. Nets, he said, is the only convenient non-cash payment method open to them.

He said: 'These are the people who will have to absorb the increased prices.

'The heartland ah peks and ah mahs who have been trained to use Nets over the last 22 years may not be able or know how to apply for an international debit card.'

Nets, which is owned by DBS Bank, OCBC Bank and United Overseas Bank, yesterday took pains to reiterate its rationale for the fee hike.

Chief executive officer Poh Mui Hoon said the system will be squeezed out of the market if it does not raise its rates: 'It is a tough but commercial decision that we have to make. We haven't raised rates for 22 years, it has to be done.'

Banks, she said, have been aggressively promoting and issuing debit cards because they get more money each time these cards are used. Each transaction with a debit or credit card earns the bank between 1.15 and 1.69 per cent of the purchase price.

And Nets will be pushed out of the market, she said, because banks may no longer issue Nets cards, opting instead for the more lucrative debit cards.

Neither Case nor the retailers buy the story.

One outraged retailer said: 'If you are facing increasing competition, shouldn't you be lowering prices to gain acceptance instead of increasing them?'

Mr Yeo fumed: 'This is like a Toyota pricing itself as a Lexus. How can they say that we have to do it because others are doing it?'

Nets, he said, was established to help Singapore move from a cash-based to a cashless society. 'Banks have a corporate social responsibility to continue to support this.'

Nets, however, yesterday said that it is trying to cushion the blow by giving small and medium sized retailers rebates of up to 25 per cent of transaction fees until the end of the year.

But on his part, Mr Yeo said that Case will be registering a complaint with the Competition Commission of Singapore against Nets' monopolistic practices.

'You know, we can't even tell people to protest or boycott - it is such a monopoly that retailers can't even say they don't want the system anymore,' he added.

weichean@sph.com.sg