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Credit-Card Backlash Mounts as Kroger Weighs Expanding Visa Ban

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Re: Credit-Card Backlash Mounts as Kroger Weighs Expanding Visa Ban

#121

Post by mehrdadn »

adrr wrote: post #110
mehrdadn wrote: post #103

Earlier quoted context omitted.

Are you sure it was "fear of fees" rather than "not having a contract with AmEx"? I would assume Visa's agreements wouldn't let them just refuse your Infinite, since it would defeat the point of the card if they could just refuse the high-fee ones. (Just a guess; I don't know how it works.)

Merchants do discriminate against card types. Some merchants will take Visa debit and not any other visa cards. Some will charge extra like Venmo and Verizon if you use anything but a Visa Debit. Some subscription merchants won't let you use non-reloadable prepaid card especially if they offer a low amount trial and its also against the merchant agreement to charge a non-reloadable prepaid card with the recurring fla…

Debit cards and credit cards are obviously different beasts though. You might as well be comparing cash against credit cards. Nobody expects them to be treated equally. The question was, can/do merchants discriminate against different types of credit cards from the same network (such as regular vs. Signature Rewards)?

Re: Credit-Card Backlash Mounts as Kroger Weighs Expanding Visa Ban

#122

Post by jamie_ca »

ashishb wrote: post #109

https://www.bostonfed.org/publications/public-policy-discuss... " On average, each cash-using household pays $149 to card-using households and each card-using household receives $1,133 from cash users every year. Because credit card spending and rewards are positively correlated with household income, the payment instrument transfer also induces a regressive transfer from low-income to high-income households in gener…

I believe it.

My MasterCard is 2% cashback (through points, but that just means I batch it), but has an annual fee of $150 for two cards, and a minimum household income. I need to spend $7500 on the card just to break even, but if I funnel nearly all my expenses through the card I can net $1000 or more a year.

These "rewards" come from the merchant, in the form of higher fees, and because the merchant can't discriminate prices between credit/cash (probably in the CC t&c somewhere) then if the merchant wants x% profit from me, they're earning >x% from someone paying cash.

Re: Credit-Card Backlash Mounts as Kroger Weighs Expanding Visa Ban

#123

Post by smnrchrds »

ckdarby wrote: post #91
Marsymars wrote: post #53

Earlier quoted context omitted.

No need for cryptocurrencies, this has been a solved problem in various countries for literal decades. See Interac in Canada, Dankort (as mentioned by another poster) in Denmark, and presumably others.

I'm a Canadian living in Canada. Nobody likes interac, debit only system and sending money to others has crazy fees for small transactions.

Simplii Financial (direct banking subsidiary of CIBC) has unlimited transactions, Interac e-transfers, Autodeposit and Request Money, Interac Flash (contactless payments), and supports Apple Pay, Google Pay, and Samsung Pay, and all these features are absolutely free. Maybe you just need to change your bank.

Re: Credit-Card Backlash Mounts as Kroger Weighs Expanding Visa Ban

#124

Post by finaliteration »

nandemo wrote: post #116
finaliteration wrote: post #113

Earlier quoted context omitted.

This is basically the approach Amazon and Starbucks have taken. Every $25 card reload via the Starbucks app probably adds up to a lot of money in saved transaction fees.

AFAIK such cards make money primarily on breakage, i.e., points that people buy but do not use.

That would make sense. There’s also the customer loyalty factor. I use the Starbucks app a lot (probably too much if I’m being honest), and all of the “stars” and “challenges” definitely work in terms of gamification.

PS you can pry my caramel macchiato from my cold, dead, jittery hands.

Re: Credit-Card Backlash Mounts as Kroger Weighs Expanding Visa Ban

#126

Post by mehrdadn »

adrr wrote: post #107
mehrdadn wrote: post #61

Earlier quoted context omitted.

This is avoiding and completely missing the point of my question. I was not asking whether card fees can vary based on how the card is processed. I was asking to precisely what extent they can vary based on the card itself . Please re-read my entire question above.

Variable interchange fees range from 0.05% for Visa Debit Cards(Big Banks) to 2.4% for VISA Infinite for most merchant categories. Fees vary by card type and also merchant type.

This is frustrating. Again, you guys are avoiding the question. I don't understand why you guys are doing this. Not only does it waste your own time and mine to be answering a different question than the one asked, you're also repeating a point others have gotten across already [1] [2]. Could you please, please actually read the question? I had very clearly and specifically asked about the same kind of card (which, lest you found the word "kind" unclear, I explicitly gave an example of: assume both cards are "Visa Rewards Signature"), for the same product, with the same merchant, processed in the same manner, etc. The only difference I am focusing on is the card perks (which, again, I gave an example of lest it was unclear: 1% vs. 2% cash back... or 5x points vs. 3% cash back, or whatever you can imagine) or perhaps the issuer (Citi vs. Chase vs. whatever). Somehow you guys are ignoring everything I've asked and repeating to me how merchant fees are different based on the card type (debit vs. credit), card kind (signature vs. regular), merchant (big vs. small), product (groceries vs. gas), etc... yes, thank you, I understood that part already [2], and I was very, very explicitly not asking about those:

> if I'm buying two of the same product (obviously -- I'm not talking about two gas vs. groceries here) with two different cards, both of which are from the same network and the same "kind" (by which I mean the categorizations listed above, like two that are both "Visa Rewards Signature"), then the merchant will pay the same fee, right? i.e. it's not like the mere fact that one pays 1% cash back and one pays 2% cash back could possibly result in a different charge to the merchant by itself if they're both (say) lumped together as Rewards Traditional?

[1] https://news.ycombinator.com/item?id=17658575

[2] https://news.ycombinator.com/item?id=17658479

Re: Credit-Card Backlash Mounts as Kroger Weighs Expanding Visa Ban

#127

Post by MrEldritch »

toomuchtodo wrote: post #104
kevin_thibedeau wrote: post #96

Earlier quoted context omitted.

Wal-Mart has had success with forcing debit transactions to withhold merchant fees.

They’re also trying to push Walmart Pay as well. At their scale, it’s worth it. Despite the pain, I still think Walmart should’ve acquired and rebranded a bank, and offered financial products. Would do wonders for the unbanked, while keeping their transaction fees down.

I seem to recall from a previous discussion about the possibility of Amazon buying a bank that such an arrangement would be extremely illegal.

IIRC, there's a law expressly prohibiting any company from both acting as a bank and a retail business.

edit: Yep, there is. The Bank Holding Company Act prevents companies in commerce from engaging in banking activities.

Re: Credit-Card Backlash Mounts as Kroger Weighs Expanding Visa Ban

#128

Post by Johnny555 »

chiph wrote: post #25

I like my rewards Visa more than I like Kroger. Good luck with that ban, guys.

I like my rewards Visa...

That's why Kroger is willing to turn you away -- they don't want to pay for your rewards.

In a business where profit margins can be a thin 1 - 2%, losing some customers that cost a 3% transaction fee while driving others to cheaper transactions can be a net win despite losing business.

Though I suspect that Visa will blink first before other retailers decide to do the same.

Re: Credit-Card Backlash Mounts as Kroger Weighs Expanding Visa Ban

#129

Post by jchb »

parshimers wrote: post #55
chiph wrote: post #25

I like my rewards Visa more than I like Kroger. Good luck with that ban, guys.

Seriously, dealing with cash is a hassle, especially on a self-checkout. Arco has tried the same nonsense and I avoid them at every turn, because it requires me to a) have cash and b) stand in line to pay , rather than it taking a moment to swipe a card.

Why do you need to stand in line to pay with cash? Maybe the self-checkout machine in particular only accepts cards, but it could look like this: https://www.ecrs.com/wp-content/uploads/2018/03/fujitsu-gene... - I see these all the time.

Re: Credit-Card Backlash Mounts as Kroger Weighs Expanding Visa Ban

#130

Post by adrr »

mehrdadn wrote: post #121
adrr wrote: post #110

Earlier quoted context omitted.

Merchants do discriminate against card types. Some merchants will take Visa debit and not any other visa cards. Some will charge extra like Venmo and Verizon if you use anything but a Visa Debit. Some subscription merchants won't let you use non-reloadable prepaid card especially if they offer a low amount trial and its also against the merchant agreement to charge a non-reloadable prepaid card with the recurring fla…

Debit cards and credit cards are obviously different beasts though. You might as well be comparing cash against credit cards. Nobody expects them to be treated equally. The question was, can/do merchants discriminate against different types of credit cards from the same network (such as regular vs. Signature Rewards)?

There is debit, prepaid, prepaid non-reloadable, business credit, business debit, government/purchasing, payroll, credit cards(gold, signature,infinite) in the US. Add international and there's a lot more like Electron(travel debit). It even gets more complicated because debit can be broken down to durbin and non durbin. You can actually get debit cards that give you rewards that charge at credit card level interchange rates.

If you're talking credit cards, I don't know anyone that discriminates against the different types but it is very possible because you can get that info from the PAN.

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