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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

#191

Post by JumpCrisscross »

function_seven wrote: post #188
JumpCrisscross wrote: post #183

Earlier quoted context omitted.

> 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]. Th…

This is one example. I gave a counterexample. Usually, branding matches to card type. But not always. The question was can they be charged differently, and the answer is yes.

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

#192

Post by cm2187 »

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…

But are they allowed to charge a surcharge to a customer for using a particular card?

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

#193

Post by matthewwiese »

smileysteve wrote: post #136
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 don't buy this because it discounts the high costs of cash controls. Cash has high costs that likely make electronic forms of payment competitive. You have - Employees skimming the till; - Theft insurance for a safe, the nightly amount in the safe - Managers balancing the cash registers with change/safe - Armored trucks picking up the money (2-3 men guarding the transfer) - Banks processing the money - Employee tim…

> Employee time and frustration they didn't come up short

To add to this, back when I was a retail cashier in high school, there was also the threat of having too much money in the register. Either by negligence, due to miscounting a customer's change, or of outright malevolence (by doing the same). Before I even began training at the register, I was told by the store manager that if the cash in my drawer at the end of my shift was over the amount that the transaction history specified I should have (I believe this was > ~$5 lifetime? It's been a few years so I'm foggy as to the exact figure) that I would be let go.

Now, I don't mean to bring this up to debate the point one way or the other, just that it is yet another friction to managing cash as opposed to credit cards.

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

#194

Post by IshKebab »

smileysteve wrote: post #136
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 don't buy this because it discounts the high costs of cash controls. Cash has high costs that likely make electronic forms of payment competitive. You have - Employees skimming the till; - Theft insurance for a safe, the nightly amount in the safe - Managers balancing the cash registers with change/safe - Armored trucks picking up the money (2-3 men guarding the transfer) - Banks processing the money - Employee tim…

Yeah but those costs are more or less fixed. The only way to reduce them is to stop accepting cash entirely.

Also just because cash has costs doesn't mean credit card fees aren't insane. They could be close to 0% if they implemented real security to reduce fraud, and there was actual competition (vendors were allowed to pass fees on to customers).

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

#195

Post by cm2187 »

Nursie wrote: post #145
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…

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)

Most credit cards in the UK offer cashback cards, at least amex does.

I am not aware that fees are caped. In fact last time I checked the fees from payment processors (like barclaycard) for a transaction online was in the region of 5%.

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

#196

Post by caf »

smileysteve wrote: post #136
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 don't buy this because it discounts the high costs of cash controls. Cash has high costs that likely make electronic forms of payment competitive. You have - Employees skimming the till; - Theft insurance for a safe, the nightly amount in the safe - Managers balancing the cash registers with change/safe - Armored trucks picking up the money (2-3 men guarding the transfer) - Banks processing the money - Employee tim…

If this was the case then merchants would happily encourage people to use cards rather than cash.

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

#197

Post by IshKebab »

Nursie wrote: post #147
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.

In the EU transaction fees are capped at 0.3% anyway, by law.

... plus fees.

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

#198

Post by fipple »

IshKebab wrote: post #194
smileysteve wrote: post #136

Earlier quoted context omitted.

I don't buy this because it discounts the high costs of cash controls. Cash has high costs that likely make electronic forms of payment competitive. You have - Employees skimming the till; - Theft insurance for a safe, the nightly amount in the safe - Managers balancing the cash registers with change/safe - Armored trucks picking up the money (2-3 men guarding the transfer) - Banks processing the money - Employee tim…

Yeah but those costs are more or less fixed. The only way to reduce them is to stop accepting cash entirely. Also just because cash has costs doesn't mean credit card fees aren't insane. They could be close to 0% if they implemented real security to reduce fraud, and there was actual competition (vendors were allowed to pass fees on to customers).

No, you typically transfer cash from a store once a day, and if 95% of your transactions are card, then you now have only 5% of your takings in your till at the end of the day.

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

#199

Post by randomsearch »

amsilprotag wrote: post #161
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…

AmEx was one of Warren Buffet's earlier investments, and a proof-of-concept of investing in companies with defensible moats. This ruling comes 55 years after his initial investment, and the moat feels as deep as ever. Later businesses have perfected the art of winning the customer relationship and solidifying their lead with hardball terms for vendors (Walmart), merchants (Amazon), advertisers (Facebook/Google), deve…

Very interesting quote from Musk: “saying you like moats is another way of saying you like oligopolies”.

I like Musk’s focus on innovation, and I also thought this was interesting because it came from one of the PayPal+ group.

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

#200

Post by radicalbyte »

Nursie wrote: post #145
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…

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)

Here in The Netherlands you basically can't use credit cards for offline purchases. Everyone uses the European debit cards with chip/pin. The fees are very low too, it's cheaper to process than cash is.
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