Hacker News Board Hacker News, browsed like a classic message board
Live data from Hacker News

Credit-Card Backlash Mounts as Kroger Weighs Expanding Visa Ban

bloomberg.com

Post reply on HN
Print view View original

151–160 of 389 posts

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

#151

Post by so33 »

finaliteration wrote: post #124
nandemo wrote: post #116

Earlier quoted context omitted.

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.

It’s win-win: Starbucks keeps their most loyal customers loyal and likely uses the “unspent” money to subsidize the loyalty program.

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

#152

Post by JumpCrisscross »

mehrdadn wrote: post #135
JumpCrisscross wrote: post #133

Earlier quoted context omitted.

> the same kind of card...where the only difference was the card perks The same card means the same perks. You're describing two different cards. They may be similarly branded. But they're different cards to the interchange and different cards (from a rewards perspective) to the consumer. If you think someone is "avoiding the question," it might be you're miscommunicating.

No, you're not reading what I wrote. I said the "same kind of card" , not the "same card" . I clearly said by "kind" I was referring to regular/Signature/whatever. We have two cards that might come from different issuers (maybe Citi vs. Chase), and/or have different points or cash back or other such perks for the cardholder (maybe 2% cash back vs. 5x points), but we assume both are Visa Signature credit cards, proces…

> different points or cash back or other such perks for the cardholder (maybe 2% cash back vs. 5x points), but we assume both are Visa Signature credit cards

Visa Signature card with 2% cash back ("A") is a different card from Visa Signature with 5x ("B"). They're just similarly branded. The text or design on the card is independent from the card itself, which is defined with an alphanumeric code within the interchange system.

In short, a merchant swiping A may be charged differently from the same merchant swiping B.

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

#154

Post by stickfigure »

kccqzy wrote: post #94

Relevant: due to Ohio v. American Express , merchants are generally unable to steer customers from using a particular card. For example if a merchant accepts Visa at all, the merchant has to accept all Visa cards, not selectively choose the lower-fee cards; the merchant also cannot tell the customer to use Discover instead to save costs and only use Visa if that's the customer's only card. This anti-steering provisio…

It has been asserted elsewhere in this HN discussion that Visa charges merchants higher amounts for transactions with higher-end rewards cards.

Assuming this is true, and these anti-steering provisions prevent merchants from discriminating, what prevents Visa from issuing cards with 200% fees? What's holding the cash back level at a mere 1-2%?

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

#155

Post by mercutio2 »

jamie_ca wrote: post #122
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 discrimin…

There are many zero fee 2% cash back cards available in the USA. Why pay fees?

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

#156

Post by winter_blue »

jamie_ca wrote: post #122
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 discrimin…

Not sure what country you live, but I live in the U.S. and I happen to have a MasterCard [1] and Visa [2] card which both offer unlimited 2% cashback with no annual fee.

[1] Citi Double Cash

[2] Fidelity Rewards Visa

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

#157

Post by northwest66 »

ams6110 wrote: post #134
jimmy1 wrote: post #117

Earlier quoted context omitted.

Most places that the poor (at least in rural areas) shop at offer substantial discounts for paying with cash. There is typically the "cash" price and the "card" price. At a liquor store, a 44 dollar bottle paid with card is 39 dollars cash. A haircut at the local barber is 13 dollars cash or 15 dollars card.

My barber doesn't take cards at all. Cash or check only.

Do you mean one of those things they write on paper slips when you say check? Which country are you from?

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

#158

Post by seszett »

avip wrote: post #144
seszett wrote: post #140

Earlier quoted context omitted.

I think most countries have that. CB in France, Interac in Canada, Bancontact in Belgium, etc. But that concept sounds like it wouldn't fare well in the US.

Interac is for debit transactions only.

As are all the national payment networks. Interac is a bit different from the others though because I don't think cards usually support both Interac and Visa/Mastercard, while in the European systems they usually do both, with terminals defaulting to the national system and using Visa/Mastercard if necessary.

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

#159

Post by mehrdadn »

JumpCrisscross wrote: post #152
mehrdadn wrote: post #135

Earlier quoted context omitted.

No, you're not reading what I wrote. I said the "same kind of card" , not the "same card" . I clearly said by "kind" I was referring to regular/Signature/whatever. We have two cards that might come from different issuers (maybe Citi vs. Chase), and/or have different points or cash back or other such perks for the cardholder (maybe 2% cash back vs. 5x points), but we assume both are Visa Signature credit cards, proces…

> different points or cash back or other such perks for the cardholder (maybe 2% cash back vs. 5x points), but we assume both are Visa Signature credit cards Visa Signature card with 2% cash back ("A") is a different card from Visa Signature with 5x ("B"). They're just similarly branded. The text or design on the card is independent from the card itself, which is defined with an alphanumeric code within the interchan…

Thank you, this finally addresses what I'm asking about. It's definitely surprising. Do you happen to know of any merchants are charged fees differently in this respect, or do you just mean it's possible from a technical standpoint?

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

#160

Post by spiznnx »

stickfigure wrote: post #154
kccqzy wrote: post #94

Relevant: due to Ohio v. American Express , merchants are generally unable to steer customers from using a particular card. For example if a merchant accepts Visa at all, the merchant has to accept all Visa cards, not selectively choose the lower-fee cards; the merchant also cannot tell the customer to use Discover instead to save costs and only use Visa if that's the customer's only card. This anti-steering provisio…

It has been asserted elsewhere in this HN discussion that Visa charges merchants higher amounts for transactions with higher-end rewards cards. Assuming this is true, and these anti-steering provisions prevent merchants from discriminating, what prevents Visa from issuing cards with 200% fees? What's holding the cash back level at a mere 1-2%?

I'm speculating that if that happened, we'd see more stories like this one.
Post reply on HN