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Visa and Mastercard agree to lower average credit card interchange fee below 1%

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Re: Visa and Mastercard agree to lower average credit card interchange fee below 1%

#221

Post by hiatus »

londons_explore wrote: post #175
e63f67dd-065b wrote: post #12

Earlier quoted context omitted.

These numbers are not public, but the grapevine is that visa/mastercard keeps about a third of all interchange. Credit card rewards are a regressive tax on the poor -- literally, only those like us here on HN with good credit can get 2% cashback on everything, the rest who pay with debit/cash effectively subsidise our 2% discount. I enjoy my 2% cashback, but really would rather see a world where, like the EU, interch…

I think there is a strong case for credit card fees to be zero for all involved, and the government paying some fixed amount for the running of basic payment processing systems. Just like the government pays to produce bank notes and coins today.

Brazil does just that with Pix.

https://en.m.wikipedia.org/wiki/Pix_(payment_system)

Re: Visa and Mastercard agree to lower average credit card interchange fee below 1%

#222

Post by danpalmer »

wanttocomment wrote: post #213
danpalmer wrote: post #78

Earlier quoted context omitted.

I'd love to see the distribution on this. My bet is that most people don't spend more and a minority spend a lot more.

It's something as small as throwing in a milk shake with lunch. you don't experience the money leaving.

I'm still not sure. I don't use a credit card for most purchases, only big things, and I think a lot of people are in that boat.

Re: Visa and Mastercard agree to lower average credit card interchange fee below 1%

#223

Post by no1lives4ever »

rjmunro wrote: post #145
throwaway426079 wrote: post #117

Earlier quoted context omitted.

I'm in the UK and I have had (still have) rewards on MC, Visa and Amex. This was the case when we were still in the EU as well.

Amex doesn't count - they run their own system end to end and charge retailers stupidly high fees. That's why most retailers don't take them. As for rewards on MC and Visa, which card are you on? In my experience, either the rewards are very small, or they are for specific retailers only, where the Bank has done a deal directly with the merchant. Occasionally they are a loss leader for the bank, working on the princi…

Chase offers a cashback card. Here is a link to their T&C: https://www.chase.co.uk/gb/en/legal/Cashback-FAQs/

Re: Visa and Mastercard agree to lower average credit card interchange fee below 1%

#224

Post by hiatus »

bmitc wrote: post #188
e63f67dd-065b wrote: post #12

Earlier quoted context omitted.

These numbers are not public, but the grapevine is that visa/mastercard keeps about a third of all interchange. Credit card rewards are a regressive tax on the poor -- literally, only those like us here on HN with good credit can get 2% cashback on everything, the rest who pay with debit/cash effectively subsidise our 2% discount. I enjoy my 2% cashback, but really would rather see a world where, like the EU, interch…

What is bps?

Basis points.

Re: Visa and Mastercard agree to lower average credit card interchange fee below 1%

#225

Post by hiatus »

dingledork69 wrote: post #216
lyrrad wrote: post #14

Looks like this is an agreement between Visa/Mastercard and banks with the Canadian Federal government to lower credit card transaction fees for small businesses. The government's press release is here: https://www.canada.ca/en/department-finance/news/2023/05/gov... Applies to annual charges below $300K/$175K CAD for Visa/Mastercard. They still will charge higher fees to large businesses. "As part of these new agreem…

How isn't this price fixing?

It is, but it's government sanctioned.

Re: Visa and Mastercard agree to lower average credit card interchange fee below 1%

#226

Post by matsemann »

yccs27 wrote: post #148
matsemann wrote: post #77

Earlier quoted context omitted.

What I often find surprising is people or shops complaining about the fees, and then trying to use cash everywhere. Dealing with cash is so incredible expensive, just because you don't see the fee doesn't mean it's not there. Like my parents had to deal a lot with cash before. That meant thataafter every shift, you had to spend time counting it, and whole processes around that. Safe storage, extra security, extra thr…

Most shops accept both cash and credit, and the costs of dealing with cash don‘t go down by much just because half your customers pay cashless.

As for my parent, it's 99% cashless. Might be one person a week or so using cash. So can now skip most of the time waste of dealing with cash. But Norway has had a high card usage for decades, so this might not be as prevalent other places.

(I lost my wallet ~2 years ago, including my cards. Everywhere is contactless, so I had no issues just using my watch/phone to pay everywhere I went, until I now recently finally replaced my cards. Even my driver's license is an app now)

Re: Visa and Mastercard agree to lower average credit card interchange fee below 1%

#227

Post by [deleted] »

55555 wrote: post #61
ulfw wrote: post #55

Earlier quoted context omitted.

Australia is the only country I've ever been at that heavily discourages using a credit card because almost every single shop charges you 1-2% MORE for using a credit card, including international hotel chains, restaurants etc. THAT is something that should be outlawed.

That should not be outlawed. The merchant is getting 1-2% less, and so they should be able to charge 1-2% more. Using a credit card at my shop is not a fundamental human right. It's much more arguable that I have the right to choose my pricing though. If you want to pay in gold I'd charge a fee for that also.

[deleted]

Re: Visa and Mastercard agree to lower average credit card interchange fee below 1%

#228

Post by carlosjobim »

nulbyte wrote: post #210
carlosjobim wrote: post #149

Earlier quoted context omitted.

- There are machines to count cash. - Storage and security doesn't have to be expensive if you're smart about it. - You can set your prices so that you don't keep running out of a certain coin. - You are not obliged to take the money to the bank. It really is not "incredibly expensive" to deal with cash.

> It really is not "incredibly expensive" to deal with cash. Yes, it is. Cash counters cost money to buy and operate. Storage and security has a cost, and even if it is not "expensive" in isolation, storing and securing cash doesn't happen in a vacuum. You really can't set prices to avoid running out of certain coins, because people buy different mixes of items that may or may not be taxable. And you are obliged to t…

It is not incredibly expensive. I've owned businesses that take cash and CC payments. Storage and security are completely dependent on location and other factors. Yes, a business that has a huge revenue might be interesting to robbers, making you have to invest in some security. But if all that huge revenue was paid with CCs you'd also have huge fees for that.

If you keep running out of a certain coin, you can usually find that a certain product or common product combination is causing it. This could also depend on your country and what coinage you have. You can also offer every customer to pay part of their purchase in coins and part by card.

> Cash counters cost money to buy and operate.

Hardly a huge cost for any business that spends a lot of time counting cash.

Many employees are fine with getting part of their salary in cash or their bonus in cash. It can also be used for other business expenses, or just your profit if you're a small business. It's mainly with small businesses customers spend cash.

Re: Visa and Mastercard agree to lower average credit card interchange fee below 1%

#229

Post by carlosjobim »

Symbiote wrote: post #193
carlosjobim wrote: post #129

Earlier quoted context omitted.

That's probably not the card fees, but the currency exchange.

Here's a sticker from a self checkout at a large supermarket (Føtex): https://imgur.com/a/w9sg1ey It says (roughly) "Payment cards without fee: All Danish and foreign debit cards" "Payment cards with fee: 0.9375% Danish issued; 1.75% foreign issued."

Wow, so that's even worse. Then you can only avoid this fee using ATM cards or cash.

Re: Visa and Mastercard agree to lower average credit card interchange fee below 1%

#230

Post by ridgered4 »

arcticbull wrote: post #169
withinboredom wrote: post #165

Earlier quoted context omitted.

I believe so, but it could also vary state-to-state.

Cash discounting was blanket permitted in all 50 states under Durbin. [1] It also de facto invalidated any clause in a merchant agreement that precluded this practice. [1] https://www.atlantafed.org/blogs/take-on-payments/2018/04/30...

Only places I've ever seen do this are gas stations. And I've calculated the discount, I've never seen it be more than the cashback I get on gas purchases from my card. Usually, it is way less. And that is without getting into losing the time saving/convenience of paying at the pump.
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