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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

#181

Post by toast0 »

bit_logic wrote: post #169

This seems like a missed opportunity for Google Pay and Apple Pay. Before smartphones and NFC, it would've been too much for every merchant to make their own card, nobody is going to carry that many cards. But imagine if Target, Walmart, Best Buy, etc. made store cards and they all integrated with Google/Apple Pay. When a customer enters the store, the app could automatically pick the right card. Google and Apple jus…

So many merchants do have their own cards, many offer incentives better than available rewards cards, but managing more than a handful of accounts quickly gets very tedious. Especially if you move, or change your checking account, or otherwise need to notify all your accounts.

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

#182

Post by Marsymars »

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.

There are a bunch of different things you're listing there, but none of them are really accurate:

* Most merchants love Interac, it's far cheaper than credit for them.

* Interac hasn't been "debit only" in a meaningful sense in some years, various banks now issue debit cards with Visa/MC fallback for international/online use.

* The last few years has seen a proliferation of banks offering free Interac etransfers. There's no reason anyone now needs to pay for etransfers or for a bank account.

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

#183

Post by JumpCrisscross »

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.

> To the merchant, and the processor, they're both Visa Signature cards

"Visa Signature" is a marketing term. In fact, two cards with the same perks and branding could have different fees. There are something like 300 kinds of interchange fees that are always being negotiated between lots and lots of parties.

The one example I know is tied to the WaMu-Wells Fargo merger. WaMu's cards were rebranded as Wells Fargo products. But old interchange agreements remained. So two identical-looking cards, with identical perks, would swipe differently for a merchant. The only clue to the customer would be the different bank identification numbers (the first few digits of a card).

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

#184

Post by bit_logic »

toast0 wrote: post #181
bit_logic wrote: post #169

This seems like a missed opportunity for Google Pay and Apple Pay. Before smartphones and NFC, it would've been too much for every merchant to make their own card, nobody is going to carry that many cards. But imagine if Target, Walmart, Best Buy, etc. made store cards and they all integrated with Google/Apple Pay. When a customer enters the store, the app could automatically pick the right card. Google and Apple jus…

So many merchants do have their own cards, many offer incentives better than available rewards cards, but managing more than a handful of accounts quickly gets very tedious. Especially if you move, or change your checking account, or otherwise need to notify all your accounts.

Banks could innovate here. Such as offering credit accounts shared by store cards. That would simplify billing and account management. The concept of credit accounts and store cards could be completely separated. Signing up for a new store card would be just pointing it to an existing credit account.

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

#185

Post by sitharus »

kasey_junk wrote: post #86
sorenbs wrote: post #18

In Denmark we have a national payment system called Dankort. All issued Visa cards also work as Dankort. Transaction fees on Dankort is one tenth of visa, and all payment terminals default to Dankort. This saves Danish retail a lot of money while still ensuring they we can buy stuff online and when traveling using visa.

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…

In New Zealand we have a similar network, EFTPOS. It’s not mandated by law and business could (but don’t) opt to only accept credit cards. However since it has no per-transaction fees for either party in most cases (some low-volume personal and business accounts have per-transaction fees) it’s reached near total market penetration.

To be clear it’s not a single network, there are two networks that fully interoperate.

Unfortunately we don’t have any regulation on credit card fees, so both credit cards go up to 2% and debit cards take over 1%. This has made the banks (who own the largest EFTPOS provider) reluctant to upgrade the system to support contactless and online transactions, both of which are possible with the technology.

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

#186

Post by ThrustVectoring »

mercutio2 wrote: post #155
jamie_ca wrote: post #122

Earlier quoted context omitted.

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?

For that matter, there's higher flat cashback percentages available if you are paying an annual fee and funneling the majority of your spend through that card. Specifically, the Alliant Cashback Visa Signature is at 2.5% with a $59 annual fee.

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

#187

Post by stephen_g »

jpatokal wrote: post #165

In Australia, despite the credit card companies and banks fighting tooth and nail against it, it's legal for merchants to charge credit card fees and the fees have to be proportionate to the actual merchant cost. https://www.accc.gov.au/consumers/prices-surcharges-receipts... Unsurprisingly, nobody uses AmEx or Diners here, because nobody's keen on paying 2% surcharges.

Plenty of places charge no fee for Amex. Usually bigger ones like Woolworths, Coles, David Jones, etc.

I use it whenever I can (for the frequent flyer rewards), and I expect quite a lot of people do since they do billions in revenue over here (but unfortunately have managed to pay no tax in Australia for several years according to investigative journalist Michael West [1]).

1. https://www.michaelwest.com.au/american-express-pays-no-tax-...

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

#188

Post by function_seven »

JumpCrisscross wrote: post #183
function_seven wrote: post #172

Earlier quoted context omitted.

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.

> To the merchant, and the processor, they're both Visa Signature cards "Visa Signature" is a marketing term. In fact, two cards with the same perks and branding could have different fees. There are something like 300 kinds of interchange fees that are always being negotiated between lots and lots of parties. The one example I know is tied to the WaMu-Wells Fargo merger. WaMu's cards were rebranded as Wells Fargo pro…

"Visa Signature" is used in the interchange fee schedule [1] to set the price. It's not just a marketing term (though obviously that, too).

If you look at the four columns in section C, there are four rates. Signature Preferred, Signature, Traditional, and "All Other".

If I sign up for merchant card processing, and select a plan that varies the rate I pay based on card, then I'm given a fee schedule like this [2]. The holographic logo on the card matters. If it says "Visa Signature", then I pay that rate. Regardless of how the customer's issuing bank decides to perk their cardholder.

[1] https://usa.visa.com/dam/VCOM/global/support-legal/documents...

[2] https://i.imgur.com/J4nvi7v.jpg

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

#189

Post by jpatokal »

stephen_g wrote: post #187
jpatokal wrote: post #165

In Australia, despite the credit card companies and banks fighting tooth and nail against it, it's legal for merchants to charge credit card fees and the fees have to be proportionate to the actual merchant cost. https://www.accc.gov.au/consumers/prices-surcharges-receipts... Unsurprisingly, nobody uses AmEx or Diners here, because nobody's keen on paying 2% surcharges.

Plenty of places charge no fee for Amex. Usually bigger ones like Woolworths, Coles, David Jones, etc. I use it whenever I can (for the frequent flyer rewards), and I expect quite a lot of people do since they do billions in revenue over here (but unfortunately have managed to pay no tax in Australia for several years according to investigative journalist Michael West [1]). 1. https://www.michaelwest.com.au/american-…

Oh, I used to use Amex here myself, but no-fee Amex acceptance really is limited to the thousand pound gorillas who can extract the best rates for themselves. Then the banks gutted consumer earning rates and I got tired of swapping between Amex and Visa in Google Pay, so I changed to a Visa with slow but steady points everywhere.

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

#190

Post by cynwoody »

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…

I have an American Express Blue Cash Preferred, with a $95 fee, and a Fidelity Rewards Visa, with no fee.

The AX card rebates 6% on groceries, 3% on gas, and 1% on everything else. The Visa pays 2% on everything else. No silly quarterly schedules on changing categories of spending.

Therefore, groceries and gas go on the AX Blue, and everything else goes on the Visa (which used to be an AX card, oops, AXP!). And, of course, both cards get paid off in full every month.

If you travel for business a lot, there are a dizzying assortment of deals. But I no longer do, so the above seems optimal for me.

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