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Is Visa taking 2% out of all my transactions?

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Re: Is Visa taking 2% out of all my transactions?

#11

Post by amscanne »

andymoe wrote: post #3

Typical credit card transactions fees range from 1.5-3.5 percent so the 2 percent is not a terrible deal and businesses usually just eat it in retail and work it into the prices. Usually there is language in the contract with the processor agreement that prevents businesses from charging different prices for credit card vs non credit card buyers.

I’ve been told that for brick and mortar retail, credit cards are sometimes more desirable because you might have more than their fees in shrinkage with cash. Even if it’s not more, it might make those fees easier to eat. I think it depends a lot on the specifics of the business.

Re: Is Visa taking 2% out of all my transactions?

#12

Post by Per_Bothner »

andymoe wrote: post #3

Typical credit card transactions fees range from 1.5-3.5 percent so the 2 percent is not a terrible deal and businesses usually just eat it in retail and work it into the prices. Usually there is language in the contract with the processor agreement that prevents businesses from charging different prices for credit card vs non credit card buyers.

"Usually there is language in the contract with the processor agreement that prevents businesses from charging different prices for credit card vs non credit card buyers."

I don't believe that is the case. However, they usually prohibit a surcharge for using a credit card - but they don't (can't?) prohibit a discount for cash. To get around that you'll sometimes see "listed price reflects cash discount - add X% if using a credit card".

Re: Is Visa taking 2% out of all my transactions?

#13

Post by sansa »

f0e4c2f7 wrote: post #5

That is correct. Most retailers build this into the price of the item and you have to pay it anyway even if you're paying cash. Sometimes you may notice that retailers will charge less if you pay cash, or will have a minimum for using the credit card machine. Especially at low volume places. This is because it's possible to even lose money on fee's if it's an especially small transaction. Visa and mastercard essentia…

As a matter of fact, Visa and Master card are nominally not a duopoly. Atleast in India, we have a practically state sponsored card issuer, RuPay[1]

[1] https://www.rupay.co.in/

Re: Is Visa taking 2% out of all my transactions?

#14

Post by [deleted] »

disadvantage wrote: post #9
humanistbot wrote: post #6

Where do you think that 1-1.5% cashback rewards on your credit card come from? It's your cut of their cut.

Cashback rewards are largely worthless and so small as to be negligible IMHO. I can understand the extreme-couponing aspect for people who budget down to the penny, but for me it's basically useless.

[deleted]

Re: Is Visa taking 2% out of all my transactions?

#15

Post by jasode »

>Visa is charging 2% for every transaction? [...] Do they provide anything in return?

VISA and its member banks + payments processors/gateways provide the financial network to give sellers (like you) the ability to accept VISA credit cards.

To put the "financial network" into more concrete terms, here are some open job listings to program the mainframes in San Francisco that VISA runs to process billions of transactions: https://usa.visa.com/careers.html

E.g. Some of that 2% processing fee pays for those developer salaries. Also, pays for the datacenter, mainframe computers, etc.

Re: Is Visa taking 2% out of all my transactions?

#16

Post by toomuchtodo »

jasode wrote: post #15

>Visa is charging 2% for every transaction? [...] Do they provide anything in return? VISA and its member banks + payments processors/gateways provide the financial network to give sellers (like you) the ability to accept VISA credit cards. To put the "financial network" into more concrete terms, here are some open job listings to program the mainframes in San Francisco that VISA runs to process billions of transacti…

Their net profit margin is 50% (2022Q1 financials). Lot of fat to trim.

Re: Is Visa taking 2% out of all my transactions?

#17

Post by f0e4c2f7 »

sansa wrote: post #13
f0e4c2f7 wrote: post #5

That is correct. Most retailers build this into the price of the item and you have to pay it anyway even if you're paying cash. Sometimes you may notice that retailers will charge less if you pay cash, or will have a minimum for using the credit card machine. Especially at low volume places. This is because it's possible to even lose money on fee's if it's an especially small transaction. Visa and mastercard essentia…

As a matter of fact, Visa and Master card are nominally not a duopoly. Atleast in India, we have a practically state sponsored card issuer, RuPay[1] [1] https://www.rupay.co.in/

Ah pardon me you are exactly correct. I meant in the United States. I don't know much about payments outside the US other than the very broad strokes.

Re: Is Visa taking 2% out of all my transactions?

#18

Post by lotsofpulp »

amscanne wrote: post #11
andymoe wrote: post #3

Typical credit card transactions fees range from 1.5-3.5 percent so the 2 percent is not a terrible deal and businesses usually just eat it in retail and work it into the prices. Usually there is language in the contract with the processor agreement that prevents businesses from charging different prices for credit card vs non credit card buyers.

I’ve been told that for brick and mortar retail, credit cards are sometimes more desirable because you might have more than their fees in shrinkage with cash. Even if it’s not more, it might make those fees easier to eat. I think it depends a lot on the specifics of the business.

Debit cards can do the same job for basically no fee.

Credit card users, however, are likelier to spend more money, and that is why many retailers are hesitant to charge credit card users more than debit card users.

Edit: note that Target does give a 5% discount on everything you buy if you pay with your bank account tied to their debit Red Card, so some retailers do seem to be changing ways.

Re: Is Visa taking 2% out of all my transactions?

#19

Post by humanistbot »

toomuchtodo wrote: post #8
humanistbot wrote: post #7

Earlier quoted context omitted.

> Like most monopolies the quality and price of service is not actually that good. I can go all around the world with just a single piece of plastic for payment. Some merchants only take local physical currency, but any merchant that has an internet connection can get a device that will securely charge my account in about 5-10 seconds max, automatically converting between local currencies. It is as close to what scie…

If you want to pay 3% more for that privilege (as a transaction surcharge), I think that’s fine, but others should be able to opt out of the rake when there are suitable instant payment alternatives (which there are in 54 countries, with the US getting instant payments next year). Pushing financial specific ISO messages on a bus should cost cents, not percentages, per transaction (US instant payments will cost $0.045…

Sure. I wasn't saying anything about the price. I was just responding to the statement that the product is not good. The product is great. The price may not be worth it. But lets not pretend like Visa/MC is a substandard product.

Re: Is Visa taking 2% out of all my transactions?

#20

Post by [deleted] »

disadvantage wrote: post #9
humanistbot wrote: post #6

Where do you think that 1-1.5% cashback rewards on your credit card come from? It's your cut of their cut.

Cashback rewards are largely worthless and so small as to be negligible IMHO. I can understand the extreme-couponing aspect for people who budget down to the penny, but for me it's basically useless.

[deleted]
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