In the meantime, the retailers have stopped accepting Nets cards from their customers, and have asked for payment in cash instead.

Federation of Merchants Associations president Chua Ser Keng told The Straits Times in Mandarin: 'The increased cost is just too high for us to swallow and we have few alternative payment options.'

Back in July, Nets upped the fees it charges merchants to use its payment system by up to four times - from between 0.35 and 0.55 per cent of the purchase price previously, to up to 1.9 per cent.

The hike, implemented in three stages, was completed this month.

The move, which came at the same time as the two percentage point increase in goods and services tax (GST), was unpopular among merchants.

A criterion in the Nets fee increase is a stipulation that merchants cannot pass the increase on to consumers - and merchants say that, taken with razor-thin margins, leaves them high and dry.

For instance, Mr Richard Gan, 62, who owns a photography shop in Funan Digita-

life Mall, said he used to transact an average of $30,000 to $40,000 a month via Nets. But since the transaction fee went up to close to 2 per cent, he has asked his customers to pay in cash instead as he is unwilling to absorb the increased costs.

Now, four merchants associations have banded together to forward a petition to Nets.

Signatories include the Bras Basah Merchants Association and People's Park Traders Association.

Mr Chua said they are asking Nets to reduce the fee to between 0.75 and 1.05 per cent of purchases.

Mr Ong San Jin, president of Bras Basah Merchants Association, said in Mandarin he still does not understand why Nets had to increase its fees: 'The service is the same, we still swipe the card, and they take money from the buyer and give it to us later - so why should they increase the price?'

This though Nets has taken pains over the past few months to explain that the fee increase is to ensure it can remain a viable business: It is under an onslaught from debit cards promoted by banks, it said.

The debit cards carry a higher fee than Nets transactions for merchants - and so, reasoned Nets, it was at the losing end.

In response to the petition notice, Nets yesterday pledged to 'listen' to its customers and 'work closely with them'.

weichean@sph.com.sg