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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

#171

Post by throwaway76543 »

kasey_junk wrote: post #99
throwaway76543 wrote: post #93

Earlier quoted context omitted.

Merchants raise prices to compensate. That is why it is "the poor, the un-creditworthy, and the financially illiterate" who ultimately pay.

Sure but I think the argument is that because those merchant fees are unknowable no one can make intelligent choices around them. The disadvantaged are obviously more impacted but it’s possible that all of us not in credit card employ or shareholder are taxed. A prisoners dilemma sort of thing. But we are well past my economics understanding.

We know generally what the rates are and the statement above is accurate: "Most people that care get a substantial portion of those fees back (either as cash or rewards)"

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

#172

Post by function_seven »

mehrdadn wrote: post #159
JumpCrisscross wrote: post #152

Earlier quoted context omitted.

> 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?

Oooh boy. I think I might return some confusion to you. I don't think the fees would vary between two Visa Signature cards, if the issuing banks decided to deliver different perks. To the merchant, and the processor, they're both Visa Signature cards, and will be priced according to the fee schedule agreed upon.

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

#173

Post by Nursie »

Symbiote wrote: post #162
Nursie wrote: post #145

Earlier quoted context omitted.

This sounds very weird to this european.... but that's probably because fees here are capped at 0.3% and AFAICT there's not really such thing as a cashback card. (I think they used to exist, just not any more)

Careful generalising the whole EU on stuff like this. These cards were very common in the UK until the new rules limiting fees were introduced. It looks like there are still a few: https://www.moneysavingexpert.com/credit-cards/cashback-cred...

I live in the UK, and that's kinda what I mean - since that rule was brought in, such things are basically unheard of.

The most you can get these days seems to be Avios or Amex rewards points.

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

#174

Post by Spooky23 »

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.

Usually that means if he has 25 customers a day, he tells the tax man about 10.

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

#175

Post by mehrdadn »

function_seven wrote: post #172
mehrdadn wrote: post #159

Earlier quoted context omitted.

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?

Oooh boy. I think I might return some confusion to you. I don't think the fees would vary between two Visa Signature cards, if the issuing banks decided to deliver different perks. To the merchant, and the processor, they're both Visa Signature cards, and will be priced according to the fee schedule agreed upon.

Haha, yeah that's what I always expected, and that's why some of us found the claim surprising (and hence why I'm trying to drill down into it). I can see it being technically possible, but from a practical standpoint, it would be very surprising for me if it actually happens.

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

#176

Post by Marsymars »

adventured wrote: post #141
kasey_junk wrote: post #86

Earlier quoted context omitted.

To be clear that’s due to laws in Denmark that require its acceptance and granting it a particular monopoly status? I’d be curious what the issue rate between the Dankort & the Kroger Plus Card. It’s conceivable that Kroger has the market heft to do with selling power what Denmark did with law. As context Kroger employees about the same number of people as 1/10th of Denmark though I have no idea how that translates t…

You can't safely inconvenience all your customers even if you're at Kroger's scale. Walmart is extremely eager to kill you if you're Kroger, to gain market share in groceries. It leaves no safe opening to upset a large share of your customers: many will go across the street to Walmart.

Walmart has had similar spates in the past. They stopped accepting Visa at various Canadian stores last year when negotiating rates with Visa.

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

#177

Post by Spooky23 »

jlarocco wrote: post #13

I'm not sure I understand why this is a big deal all of the sudden. Don't retailers already account for these costs when they're choosing prices?

Grocers are being squeezed from all sides. Walmart and Target are spending lots of money to take dry goods market share — they will spend $8 to ship you a little box of onion dip. Costco and BJs pull in families.

Amazon is doing all of the stuff they are doing.

Kroger is bigger, but lacks the scale of the giants. And most grocery stores are regional affairs whose footprint is limited by their distribution network and who cannot raise money because why would you when the competition is a behemoth like Amazon who can lose billions to get market share.

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

#178

Post by rahimnathwani »

sokoloff wrote: post #97
jlarocco wrote: post #13

I'm not sure I understand why this is a big deal all of the sudden. Don't retailers already account for these costs when they're choosing prices?

The average profit margin for a mainstream grocer (like Kroger) is 1-2 percent. It's a low-margin, high-volume business. Said differently, it's exactly the type of business that I'd expect to care deeply about transaction fees.

https://ycharts.com/companies/KR/gross_profit_margin

>20% gross margin

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

#179

Post by MrEldritch »

wiredfool wrote: post #167
MrEldritch wrote: post #127

Earlier quoted context omitted.

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.

How did Sears do it with Discover, or is this a recent thing?

I was able to find the law I was thinking of, and it was passed in 1956, so not terribly recent, no.

Apparently it's because the BHCA defines banks as entities marketing both checking accounts and commercial loans, and Discover Bank makes no commercial loans and is thus not, under the terms of that law, technically an actual bank.

(Also, apparently the BHCA restricts banks from operating across state lines, too.)

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

#180

Post by Marsymars »

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.

> Despite the pain, I still think Walmart should’ve acquired and rebranded a bank, and offered financial products.

They do, outside the US. They operate Walmart Canada Bank (and issue Walmart Mastercards), although they've recently sold it.

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