A Straits Times check with 80 retailers - ranging from provision shops to second-hand cellphone stores - found that one in three either charges customers to use Nets or place a minimum sum on their purchases.

The majority were in neighbourhood shopping strips, though some were in major malls such as VivoCity.

The stores' contracts with Nets, Singapore's dominant player in the cashless transaction game, forbid those practices.

Store owners, however, said they are having trouble affording the system and have little choice but to pass the fees on to consumers.

Last September, the Network for Electronic Transfers (Nets) roughly quadrupled its fees. Store owners now pay the company up to 1.9 per cent of an item's purchase price. This is on top of the cost to rent the Nets machine, which is between $40 and $80 per month, depending on the individual agreements.

Toa Payoh provision store owner, Mr Ong Liang Eng, began charging customers a flat fee of 30 cents last year to cover the increase in fees.

'Nets charges us, so we charge customers. It is fair,' said Mr Ong, who knows that passing on the cost is not allowed.

During the Straits Times check of 80 stores, nine revealed they charge either a flat fee of 30 to 50 cents per transaction or a percentage of the purchase price, generally between 1.5 and 3 per cent.

Seventeen stores require a minimum purchase of between $5 and $10, and 18 stores do not accept Nets. The rest let customers use the service for free. Stores that break the rules receive a warning from Nets.

Retailers can stop offering the service, but many are reluctant to part with a system that is popular with consumers, who are carrying less cash than before.

'Sometimes if merchants reject using Nets, they lose customers so they have no choice. There is a lot of competition,' said Mr Chua Ser Keng, 63, president of the Federation of Merchants' Associations, Singapore.

Some retailers, though, are biting the bullet.

Owner of Heng Seng Pawn Shop stopped accepting Nets two months ago. 'We ask customers to withdraw money, and they do. There is no big problem and we save money,' said Mr Paul Ho, co-owner of the Toa Payoh outlet. The 31-year-old reckons the decision will save the chain $10,000 a year.

In the past, Nets has said the increase in transaction fees was necessary to maintain the viability of the service. The company was unable to comment yesterday before press time.

Customers can reject surcharges from stores, said the Consumers Association of Singapore, which urged Singaporeans to report such cases. The consumer watchdog has received 15 reports from disgruntled consumers in the past two years.

Meanwhile, consumers said that they are surprised that these charges are prohibited.

'I had no idea this was going on. I thought we were supposed to be charged. I do not think it is right,' said housewife Irene Low, 47.

Others intend to stop using the service altogether.

Undergraduate Chong Zhi Rong, 23, said: 'If I have to absorb the surcharge, I would rather pay for my purchases using cash or debit card. I should not have to incur extra costs for this service.'

limjess@sph.com.sg

daryltan@sph.com.sg

ADDITIONAL REPORTING BY HE ZONGYING

CASH ONLY

'We ask customers to withdraw money, and they do. There is no big problem and we save money.'
MR PAUL HO, co-owner of Heng Seng Pawn Shop in Toa Payoh, which stopped accepting Nets two months ago