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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

#21

Post by oasisbob »

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?

They do, but different cards on different networks have vastly different fees.

The consumer using Visa SuperRewardsPlatinum probably doesn't know that it's costing the retailer more than other cards when they use it.

The originating bank does though, which is exactly why they chose that network in the first place. The market is opaque and doesn't lead towards lower fees and greater efficiency.

It reminds me of super-expensive "we'll pay your insurance deductible" auto glass places which used to advertise on TV all the time. Inflate the cost, and give the consumer a kickback.

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

#22

Post by anamexis »

mehrdadn wrote: post #19
koolba wrote: post #12

Earlier quoted context omitted.

That’s available in many places in USA as well though everywhere I’ve seen charges a transaction fee which nets it negative for the consumer.

What's the fee? Is it higher than the 2% cash back Citi gives you?

They're typically 2.5 - 3.5%.

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

#23

Post by oasisbob »

ThrustVectoring wrote: post #20
cagenut wrote: post #3

Good? I hate the asinine secondary market of "points". Just don't take the money in the first place and then we don't have to sort out how I can reclaim it somehow.

The economics of it isn't just handing you your own money with a couple arbitrary hoops in the way. There's a portion of cross-subsidy from cash, debit, and low-rewards credit card payers, along with capturing some of the merchant's efficiency gains of using cards over cash (harder for employees to steal, no need for armored cars for cash pickups, etc).

Unless a retailer doesn't accept any cash, the marginal cost of accepting another cash transaction is low.

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

#26

Post by lowpro »

I hate credit card fees as much as the next guy, but to be fair my credit card was the only way I could pay for things in Asia since I just lived there for 6 months. If I had used cash, the only ATM near me stole my friends debit card, and multiple people I know were robbed and pick-pocketed. My credit card insulated me from those risks, which I was fine paying an extra 1% for.

Now that I’m back in America the risk is far less, but what alternatives in America are there? I hope the payment apps/wallets become universal but we definitely aren’t there yet.

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

#27

Post by mehrdadn »

westoque wrote: post #24

These kinds of problems (swipe fees, etc) is where I believe cryptocurrencies shine. Having a fee payment which is reasonable and fast confirmation times would solve this problem immediately removing the need for third parties.

> These kinds of problems (swipe fees, etc) is where I believe cryptocurrencies shine. Having a fee payment which is reasonable and fast confirmation times would solve this problem immediately removing the need for third parties.

Isn't this precisely where cryptocurrencies have utterly failed with their high fees and long confirmation times?

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

#28

Post by mehrdadn »

oasisbob wrote: post #21
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?

They do, but different cards on different networks have vastly different fees. The consumer using Visa SuperRewardsPlatinum probably doesn't know that it's costing the retailer more than other cards when they use it. The originating bank does though, which is exactly why they chose that network in the first place. The market is opaque and doesn't lead towards lower fees and greater efficiency. It reminds me of super-…

> The consumer using Visa SuperRewardsPlatinum probably doesn't know that it's costing the retailer more than other cards when they use it.

You mean the merchant pays a higher fee when you use one Visa card vs. another Visa card? Or you mean compared to Mastercard etc.?

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

#30

Post by oasisbob »

freeopinion wrote: post #6
devoply wrote: post #4

> over the $90 billion they pay in swipe fees every year. > Kroger's revenue was 122.7 billion USD in 2017 That makes little sense and makes me wonder why Kroger does not issue its own credit card. Credit cards are a rent-seeking racket that eat lots of profit. Everyone knows it but no one knows what to do about it.

When you take things out of context they often don't make sense. The "they" in the first quote was "retailers." It was not qualified at all, so that should be all retailers around the world combined, from Alibaba to Mom's Bait Shop. They don't provide any source for that figure, so trust it at your own risk.

The figure sounds reasonable to me.

IIRC, a recent figure for US interchange revenue to originating banks was around $40 billion a year. (Interchange fees are a large component of swipe fees.)

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