Chargepoint is rolling out a "Pay as You Go" model soon

jhalkias

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Just got the below email

Ford Mustang Mach-E Chargepoint is rolling out a "Pay as You Go" model soon Screenshot 2023-04-24 at 12.09.01 PM
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That's kinda surprising. I suspect there will be a per-charge surcharge on pay-as-you-go. I work in credit card processing; I believe the main reason for these companies to have balance tracking is because a credit card transaction can cost like 30c+x% or more. Sure, if I'm charging overnight and paying $8-10 that's not a huge slice, but if it's only an hour or two $1-2 has a horrible ROI.

Charging to refill balances reduce processing fees.

Remember it's more accounting work for ChargePoint to carry a balance for you than to charge directly, so there's gotta be a reason to do so... The reason historically is to encourage business owners to put chargers that will be a positive cash flow. So, those credit card processing fees will be passed along. Businesses never pay fees or taxes, it's always passed to the consumer.
 

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That's kinda surprising. I suspect there will be a per-charge surcharge on pay-as-you-go. I work in credit card processing; I believe the main reason for these companies to have balance tracking is because a credit card transaction can cost like 30c+x% or more. Sure, if I'm charging overnight and paying $8-10 that's not a huge slice, but if it's only an hour or two $1-2 has a horrible ROI.

Charging to refill balances reduce processing fees.

Remember it's more accounting work for ChargePoint to carry a balance for you than to charge directly, so there's gotta be a reason to do so... The reason historically is to encourage business owners to put chargers that will be a positive cash flow. So, those credit card processing fees will be passed along. Businesses never pay fees or taxes, it's always passed to the consumer.
I think a lot of places just do batch processing of transactions instead of doing them instantly at POS to save on credit card processing fees.
 

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Wonder if part of this is to get in line for federal funding. I remember hearing something about payment method systems had to function a certain way.

I am happy they are doing this move. Kinda sucks they never really let you set a re-load amount.
 

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Unfortunately the batch doesn't reduce fees because the fees are per transaction. Unless the card is tokenized and processed once, even though the transactions are batched, there's still multiple transactions. The brands also don't like this, not only because it cuts into their profits, but because customers get upset when their statement is different than their recollection.

Especially now with realtime card notifications, running at the end of the day is frowned upon.

Also, note, there's a difference between authorization (hold 5 dollars for me) and capture (transfer 5 dollars to me). Authorizes happen live, captures may be batched at the end of the day to capture tips in a tipping environment.

For car charging, unless you hit multiple ChargePoint stations a day, it's unlikely they can do anything clever beyond storing a balance .

Again, merchants don't care anymore, because the brands let them charge cardholders fees now. So, again, businesses never pay taxes or fees, they're always paid by the consumer as fees or increased prices.
 


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I got the same email and it's a bit of a surprise to be honest.

If you visit StarBucks regularly, you may have a StarBucks card. They use a similar concept where you add money to your card account then just pay with your card (or phone app). If the balance drops below some threshold, Starbucks will automatically re-add money from your bank.

This concept works SO VERY WELL that the amount of money on deposit at Starbucks exceeds a large percentage of banks in the country. I can find articles citing something like $1.4B back in 2016 but I've recently heard it's about double that these days (although I can't seem to find data to confirm if that's true).

Better still ... people who eventually stop going to Starbucks don't "withdraw" their money. They basically just abandon it and that's free money to Starbucks.

It's a HUGE cash cow for Starbucks. So when I look at things like the ChargePoint model -- I always think of Starbucks because it basically works the same. The notion that they would switch to pay-as-you-go rather than carrying a balance ... is a bit surprising because I would think they'd get a rather large infusion of cash from the debit model.

I'll concede that there are a LOT more Starbucks stores and customers than ChargePoint locations and customers. But I would still think the debit model would be worth millions to them. I would think they would likely start including some type of fee to compensate for the credit card charge.
 

generaltso

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That's kinda surprising. I suspect there will be a per-charge surcharge on pay-as-you-go. I work in credit card processing; I believe the main reason for these companies to have balance tracking is because a credit card transaction can cost like 30c+x% or more.
Maybe they'll require payment from a checking account to use pay as you go. That was the case for the EZ Pass that I just signed up for.
 

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Maybe they'll require payment from a checking account to use pay as you go. That was the case for the EZ Pass that I just signed up for.
EZpass is tolls? They might have a larger tolerance for failed payments.

The problem with ACH payments (bank accounts) is that the merchant has no way to know if you have an available balance before sending the request. So if I set up my checking account, take $18 of energy from a charger, but I don't have $18 in my account, they will have to chase me down and bill me, which is a big headache.

In addition, ACH takes 1-3 days to process, so anything can happen to your balance between now and then, which could cause an ACH to "bounce". Usually there's no fee for a bounced ACH but that's up to your bank and the merchant.

With a credit card transaction, the merchant is able to request a hold of funds (the authorize) and then charge the actual amount later (the capture). When you go to a gas station in your pre-MME days, they would authorize $50-150, which puts the "hold" on those funds that you see pinging your available balance. The pump would then know it's safe to pump up to the authorized amount because that money is held by the network. Technically, the transaction should be immediately captured when you hang up the pump, but as was said above many places "batch" the captures at the end of the day (then blame your bank on the sticker saying it can take "days" to release your hold).

When I charge at EA with my credit card, they hold $50 before they charge, then capture for the real amount when I hang up the cable, releasing the balance for use later.

It's the same thing hotels do when you check in. Hold an amount for incidentals so they are guaranteed to get paid for your micro-bottle of vodka when you check out, except at a smaller scale.

ACH isn't guaranteed and unlike cards can't hold amounts to guarantee payment.

Credit card Pay-as-you-go will involve fees and holds on your account.

Thank you for coming to my TED talk.
 

generaltso

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EZpass is tolls?
Yes, it's for tolls. I'm not an expert on it though since there are no tolls in my state. It probably helps that they also capture a picture of your license plate, so they have a different way to charge you if the ACH fails. I guess that wouldn't be the case with ChargePoint.
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