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Square to no longer return processing fees when buyers are issued a refund

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Re: Square to no longer return processing fees when buyers are issued a refund

#101

Post by SQueeeeeL »

pcarolan wrote: post #89
cwkoss wrote: post #86

Sounds like the real villains are the credit card companies who have the market power to enforce fees on cancelled payments. They are so entrenched no one is even questioning their position anymore. Visa and Mastercard are massive drains on our economy - it's ridiculous how unquestioningly their 3% tax on commerce is accepted.

In Australia, this is regulated and they can charge no more than 1.5%. https://www.accc.gov.au/consumers/pricing/card-surcharges This could be changed overnight with 1 piece of legislation.

The American system is too deeply tied to capital to have a policy that actually helps citizens and small businesses get passed. The second a government official proposed something like this, the espionage arms of the credit card corporations would come down so hard on them and arrange for them to fail their next appointment (through "lobbying")

Re: Square to no longer return processing fees when buyers are issued a refund

#102

Post by remram »

cwkoss wrote: post #86

Sounds like the real villains are the credit card companies who have the market power to enforce fees on cancelled payments. They are so entrenched no one is even questioning their position anymore. Visa and Mastercard are massive drains on our economy - it's ridiculous how unquestioningly their 3% tax on commerce is accepted.

France has its own payment network, CB (previously Carte Bleu). Payment cards emitted by French banks are usually both CB and Visa, which allows French banks to route payments through CB rather than Visa. This could probably be done by other groups, national or otherwise, with little effect on users.

https://fr.m.wikipedia.org/wiki/Groupement_des_cartes_bancai...

Re: Square to no longer return processing fees when buyers are issued a refund

#103

Post by crazygringo »

potamic wrote: post #12
crazygringo wrote: post #5

Earlier quoted context omitted.

It's not a penalty, it's just a cost of using the network. If you use the credit card network not just once but twice -- once to process a purchase and then yet again to refund it -- you're using that infrastructure. It makes sense you'd pay for its usage. If you drive to work on a toll road and then drive back home along the same toll road, you still have to pay the tolls even though you wound up in the same place a…

By that logic they should charge by request volume, not by percentage of amount. As a matter of fact, there is no logic in pricing. Sellers will charge what they can get away with, buyers will pay what they can afford. And of course, it is always negotiable.

Well they actually do both, they charge by volume and percentage.

There is absolutely logic in pricing in terms of setting a pricing floor, which often comes from a combination of fixed and variable costs.

Of course you are right that there is flexibility above that, but again there's absolutely logic there as well in terms of price discrimination mechanisms.

None of this is just arbitrary. These companies put a lot of thought, and logic, into their pricing mechanisms. Get it exactly right and you make a lot of money, get it a little bit wrong and you go out of business.

Re: Square to no longer return processing fees when buyers are issued a refund

#104

Post by jsonne »

falcolas wrote: post #70
jsonne wrote: post #37

Earlier quoted context omitted.

This isn't true in payments. There are many reseller orgs, indie processors, etc. that are happy to negotiate heavily based on volume etc. Source: I was director of digital marketing for a payments company a few years ago.

That sounds like the usual "big businesses get extra considerations that small businesses do not". And since small businesses are the vast majority in number, negotiation is absolutely not something they can rely upon. Or, to put another way, someone selling handmade goods at a fair using Square will never have more negotiation power than "if you don't like it, leave".

You negotiate by not using square and using an alternative system in that scenario. There are price competitive options even for small businesses. The UI might be clunkier and the equipment more dated but that is the tradeoff.

Re: Square to no longer return processing fees when buyers are issued a refund

#105

Post by crazygringo »

potamic wrote: post #51
klodolph wrote: post #15

Earlier quoted context omitted.

That assumes that the cost is proportional to the number of transactions, and is completely uncorrelated to the size of the transaction, which doesn’t make any sense to me. Any costs due to risk will be larger for larger transactions.

Risk is almost always borne by the merchant or the bank, never the processor.

But only a small portion of the interchange fee goes to the credit card processor. Most of it goes to the bank.

How else do you think credit cards are able to do things like pay 2% rewards?

So the argument still holds. Banks hold more risk on larger transactions.

Re: Square to no longer return processing fees when buyers are issued a refund

#106

Post by xp84 »

kevinsundar wrote: post #4
CryptoBanker wrote: post #3

Earlier quoted context omitted.

I fail to see why there’s a penalty for a refund. A chargeback would be one thing, but a refund is a totally normal business process

It costs Square money (card network costs) to refund a transaction. It's not a penalty, it's just costs associated with moving money. Even if the money is moving the other way, there's still a cost.

Definitely "The way it is" -- but it does seem greedy. All systems drift toward the greediest possible implementation, though, in the absence of competition or regulation mandating otherwise, of which we have neither.

Re: Square to no longer return processing fees when buyers are issued a refund

#107

Post by [deleted] »

theFletch wrote: post #97
cwkoss wrote: post #86

Sounds like the real villains are the credit card companies who have the market power to enforce fees on cancelled payments. They are so entrenched no one is even questioning their position anymore. Visa and Mastercard are massive drains on our economy - it's ridiculous how unquestioningly their 3% tax on commerce is accepted.

A lot of local shops near me pass the processing fees to their customers. Usually with a small sign at the register that says 3% added for credit card payments.

[deleted]

Re: Square to no longer return processing fees when buyers are issued a refund

#108

Post by amethyst »

themaninthedark wrote: post #99
cwkoss wrote: post #86

Sounds like the real villains are the credit card companies who have the market power to enforce fees on cancelled payments. They are so entrenched no one is even questioning their position anymore. Visa and Mastercard are massive drains on our economy - it's ridiculous how unquestioningly their 3% tax on commerce is accepted.

Cash still works and if you can get enough people to go back to using it then credit cards will have to change or be more ripe for disruption.

The convenience of credit cards — and customers' willingness to spend more when they are accepted — is worth more to retailers and customers than the processing fees.

I for one never carry cash, and I will happily pay any extra transaction fees from local businesses for the opportunity to reduce the size of my wallet, the cost/risk of casual theft, and the need to queue at an ATM for cash as part of my daily life.

Re: Square to no longer return processing fees when buyers are issued a refund

#109

Post by AussieWog93 »

pcarolan wrote: post #89
cwkoss wrote: post #86

Sounds like the real villains are the credit card companies who have the market power to enforce fees on cancelled payments. They are so entrenched no one is even questioning their position anymore. Visa and Mastercard are massive drains on our economy - it's ridiculous how unquestioningly their 3% tax on commerce is accepted.

In Australia, this is regulated and they can charge no more than 1.5%. https://www.accc.gov.au/consumers/pricing/card-surcharges This could be changed overnight with 1 piece of legislation.

That article is about businesses charging excessive surcharges to customers (e.g. Jetstar back in the day charging 5% extra for Visa/MasterCard, when it only cost them 0.7%).

There are no laws against high processing fees; Afterpay takes around 8% for example.

Re: Square to no longer return processing fees when buyers are issued a refund

#110

Post by unglaublich »

SQueeeeeL wrote: post #101
pcarolan wrote: post #89

Earlier quoted context omitted.

In Australia, this is regulated and they can charge no more than 1.5%. https://www.accc.gov.au/consumers/pricing/card-surcharges This could be changed overnight with 1 piece of legislation.

The American system is too deeply tied to capital to have a policy that actually helps citizens and small businesses get passed. The second a government official proposed something like this, the espionage arms of the credit card corporations would come down so hard on them and arrange for them to fail their next appointment (through "lobbying")

CC companies are genius.

They charge companies 3% -> companies embed that 3% in their prices -> customers get a 1% refund from CC companies.

- If you do NOT use a CC, you effectively pay _more for CC users_ (3%!).

- CC companies make the customer feel like they have a benefit, while in fact, they are net payers too (2%).

- They have access to all (private) data of the customer, which is extremely powerful in this age and time.

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