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TreeCard: The wooden debit card that plants trees

treecard.org

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Re: TreeCard: The wooden debit card that plants trees

#11

Post by zrail »

eatonphil wrote: post #8

How it works: > No. Zero fees. TreeCard will be 100% free to use. > Every time you use your TreeCard, Mastercard processes the transaction and charges merchants (online and physical stores) a small fee. This is a standard fee paid by all merchants to1 accept card payments. We'll use that fee to plant trees. I'm confused though. Surely this fee Mastercard charges goes to Mastercard, not the card company? https://www.t…

The keyword is "interchange".

(disclosure: I work for Stripe but this is my own recollection of how this all works and could be wrong in the details)

There are multiple parties at play in a card network transaction:

0. The card holder

1. The card brand (TreeCard)

2. The issuing bank (unknown right now, but this is usually a bank like HSBC, Citi, Wells Fargo, etc)

3. The card network itself (MasterCard)

4. The merchant

5. The merchant's acquirer (Square, for example)

6. The merchant's acquiring bank (whoever Square uses as their baking provider)

Each entity other than the card holder and the merchant charge fees. The card holder _sometimes_ is charged a fee, but in this case TreeCard does not. The merchant is always charged a fee (which they can pass onto the customer in certain countries/circumstances).

The per-transaction fee the merchant pays is split between the card network and the issuing bank. The issuing bank then generally will share a portion of this revenue with the card brand.

Merchants are also charged by their acquiring bank, either on a per-transaction basis or a flat monthly fee.

Re: TreeCard: The wooden debit card that plants trees

#12

Post by Symbiote »

chrisseaton wrote: post #6
slekker wrote: post #3

Earlier quoted context omitted.

Why dicey?

They don't have the same legal protections for their use. There's hardly ever any reason to use a debit card over a credit card.

In the EU, there are lower charges for the merchant when a debit card is used. Sometimes, this results in a small charge for using a credit card.

(Note that TreeCard is an English company, where they have inherited this cost difference.)

Re: TreeCard: The wooden debit card that plants trees

#13

Post by thiscatis »

eatonphil wrote: post #8

How it works: > No. Zero fees. TreeCard will be 100% free to use. > Every time you use your TreeCard, Mastercard processes the transaction and charges merchants (online and physical stores) a small fee. This is a standard fee paid by all merchants to1 accept card payments. We'll use that fee to plant trees. I'm confused though. Surely this fee Mastercard charges goes to Mastercard, not the card company? https://www.t…

The bulk of the fee the merchant pays is actually interchange. It goes to the issuing institution (your bank, challenger bank or fintech). The rest goes to the processor (Stripe, Adyen, etc.. and the scheme such as Visa or Mastercard).

Re: TreeCard: The wooden debit card that plants trees

#14

Post by chrisseaton »

Symbiote wrote: post #12
chrisseaton wrote: post #6

Earlier quoted context omitted.

They don't have the same legal protections for their use. There's hardly ever any reason to use a debit card over a credit card.

In the EU, there are lower charges for the merchant when a debit card is used. Sometimes, this results in a small charge for using a credit card. (Note that TreeCard is an English company, where they have inherited this cost difference.)

> Sometimes, this results in a small charge for using a credit card.

That's not the way it's been for years - it became illegal in the UK to do this a while ago.

Re: TreeCard: The wooden debit card that plants trees

#15

Post by eatonphil »

chrisseaton wrote: post #9
eatonphil wrote: post #8

How it works: > No. Zero fees. TreeCard will be 100% free to use. > Every time you use your TreeCard, Mastercard processes the transaction and charges merchants (online and physical stores) a small fee. This is a standard fee paid by all merchants to1 accept card payments. We'll use that fee to plant trees. I'm confused though. Surely this fee Mastercard charges goes to Mastercard, not the card company? https://www.t…

How do you think card companies make money at the moment? In exactly the same way - you buy something, the merchant is charged a fee, the payment provider takes a cut, the card company gets a cut. Sometimes they pass some of this cut on to the customer as well (the cashbacks and rewards.)

It's the wording that confuses me. It would make sense if the card company were responsible for paying a fee to Mastercard on each purpose. That way they could increase that fee and take the difference.

But the way this is worded (and I suppose it must be how it works) it means that Mastercard charges a fee and you have an agreement to take some of that fee from Mastercard on each transaction. Just seems a little backwards.

Re: TreeCard: The wooden debit card that plants trees

#16

Post by TeMPOraL »

chrisseaton wrote: post #6
slekker wrote: post #3

Earlier quoted context omitted.

Why dicey?

They don't have the same legal protections for their use. There's hardly ever any reason to use a debit card over a credit card.

Better secured and you're using the money you have vs. taking a loan?

I ditched my CCs as soon as debit cards could be reliably used for on-line purchases. And AFAIK, the no.1 personal finance advice is "stop using CCs".

I'm in Europe, though. That may be an European thing.

Re: TreeCard: The wooden debit card that plants trees

#17

Post by chrisseaton »

eatonphil wrote: post #15
chrisseaton wrote: post #9

Earlier quoted context omitted.

How do you think card companies make money at the moment? In exactly the same way - you buy something, the merchant is charged a fee, the payment provider takes a cut, the card company gets a cut. Sometimes they pass some of this cut on to the customer as well (the cashbacks and rewards.)

It's the wording that confuses me. It would make sense if the card company were responsible for paying a fee to Mastercard on each purpose. That way they could increase that fee and take the difference. But the way this is worded (and I suppose it must be how it works) it means that Mastercard charges a fee and you have an agreement to take some of that fee from Mastercard on each transaction. Just seems a little bac…

> But the way this is worded (and I suppose it must be how it works) it means that Mastercard charges a fee and you have an agreement to take some of that fee from Mastercard on each transaction. Just seems a little backwards.

I don't really see why that's backwards? The mechant pays for a service (accepting card payments) from Mastercard. Mastercard take some of that fee and give it to the card provider so they can cover the costs of running your card, such as their website and phone lines, or in this case planting trees as well. Where's the backwards bit?

Re: TreeCard: The wooden debit card that plants trees

#18

Post by capableweb »

chrisseaton wrote: post #6
slekker wrote: post #3

Earlier quoted context omitted.

Why dicey?

They don't have the same legal protections for their use. There's hardly ever any reason to use a debit card over a credit card.

This is location dependent though. A easy way to see if someone is from the US, is if they advice you to prefer credit cards rather than debit cards.

Meanwhile in Europe, there is no reason to have a credit card instead of debit. On the contrary, it's more risky to have a credit card rather than debit as on debit cards the limit for overdraft is usually way lower than how much someone could spend with your credit card.

I'm 30+ and never owned a credit card, nor had any reason to get one.

Re: TreeCard: The wooden debit card that plants trees

#19

Post by eatonphil »

chrisseaton wrote: post #17
eatonphil wrote: post #15

Earlier quoted context omitted.

It's the wording that confuses me. It would make sense if the card company were responsible for paying a fee to Mastercard on each purpose. That way they could increase that fee and take the difference. But the way this is worded (and I suppose it must be how it works) it means that Mastercard charges a fee and you have an agreement to take some of that fee from Mastercard on each transaction. Just seems a little bac…

> But the way this is worded (and I suppose it must be how it works) it means that Mastercard charges a fee and you have an agreement to take some of that fee from Mastercard on each transaction. Just seems a little backwards. I don't really see why that's backwards? The mechant pays for a service (accepting card payments) from Mastercard. Mastercard take some of that fee and give it to the card provider so they can…

Well just historically speaking the easiest way to be a middleman is to charge a fee on top of what you're middleman-ing. And this doesn't work like that.

But who am I to say what's backwards? :D

Re: TreeCard: The wooden debit card that plants trees

#20

Post by lol768 »

chrisseaton wrote: post #6
slekker wrote: post #3

Earlier quoted context omitted.

Why dicey?

They don't have the same legal protections for their use. There's hardly ever any reason to use a debit card over a credit card.

This depends upon the geographical location and indeed, the amount you're spending.

I'd definitely use my Amex for items over £100 (for Section 75 protection) but under that amount my understanding was that you're reliant on the (voluntary) chargeback scheme which I can use with my bank and debit card too.

So the only thing you really gain for the smaller purchases is the money not leaving your account with the CC, I think?

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