Credit-Card Backlash Mounts as Kroger Weighs Expanding Visa Ban • Hacker News Board

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

#221

Post by michaelt » Wed, Aug 01, 2018, 8:32 AM UTC

fipple wrote: post #198

IshKebab wrote: post #194

Earlier quoted context omitted.

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.

The costs of counting and banking cash are proportional to the amount of cash you take - but the costs of CCTV cameras to point at cash drawers and the driver hours for a single daily armoured car collection are the same regardless of how much money is involved.

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

#222

Post by daemin » Wed, Aug 01, 2018, 9:03 AM UTC

bdowling wrote: post #213

cm2187 wrote: post #192

Earlier quoted context omitted.

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

The charge is to the merchant, not to the customer. In general, the price marked on the good factors in the credit card fees, because almost everyone uses credit cards. So, if a buyer uses cash or a debit card, he should always negotiate for a 1-2% discount. Edit: To clarify, some U.S. merchants do charge a "credit card fee" or enforce a minimum charge amount to all customers using credit cards for their purchases. I…

In Australia the government put in legislation to cap the maximum credit card surcharge that a merchant could charge the customer to the actual fee that they pay on the card.

When I was there I remember things like $10 or $20 minimum and also anywhere up to 5-10% surcharge for paying with a card.

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

#223

Post by icebraining » Wed, Aug 01, 2018, 9:08 AM UTC

bit_logic wrote: post #184

toast0 wrote: post #181

Earlier quoted context omitted.

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.

Isn't that essentially what Visa et all do?

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

#224

Post by mehrdadn » Wed, Aug 01, 2018, 9:08 AM UTC

JumpCrisscross wrote: post #191

function_seven wrote: post #188

Earlier quoted context omitted.

"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.

This is a interesting discussion -- and I'm seeing a subtle point here that's getting lost. If I understand your merger example correctly, you're suggesting that a card that is now marketed as Visa Rewards Traditional, for example, may still truly be a Visa Rewards Signature card underneath from before the merger (or whatever the prior classification was).

However, what I find important here is that the card still is, in fact, categorized by those classes, and that categorization is merely misreported to the consumer. As far as the merchant is concerned, though, it really is a Signature card that was swiped(/inserted), and that Traditional vs. Signature classification still really is the only thing determining the rate -- i.e., what the card's perks or issuer are still cannot affect the fees once the merchant knows whether the card is truly a Signature or a Traditional card. See what I mean?

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

#225

Post by Dwolb » Wed, Aug 01, 2018, 9:09 AM UTC

cycrutchfield wrote: post #62

Dwolb wrote: post #50

Earlier quoted context omitted.

Imagine if you ran a $1B/year business with 10% profit margins and Visa took 2% of revenues. Profit before Visa is $100M, profit after Visa is $80M. If you negotiated Visa’s fees down to 1.5%, profit after Visa would be $85M. This is a 6% improvement in operating profit which is a lot.

Imagine if you ran a $1B/year business with 10% profit margins and 20% of your customers only have one credit card, a Visa. Profit before Visa is $100M, profit after Visa is $80M.

I’m not sure I fully understand the point.

Is it that people won’t shop at a store if Visa isn’t accepted?

If so, I agree that is one of many additional factors in the overall negotiations.

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

#226

Post by Nursie » Wed, Aug 01, 2018, 9:10 AM UTC

pandasun wrote: post #202

Nursie wrote: post #150

Earlier quoted context omitted.

This is where government regulation shines - 0.3% max fee in the EU

Ah that explains why I was put on hold for 1 hour and 20 minutes when I called Visa Customer Service in France.

Visa have a customer service line? (Serious question)

The only time I've ever interacted with them directly was a job interview for a role in their UK office in Basingstoke (I didn't take it).

If I had a problem with my card I'd call my card issuer. Not VISA. Why would you have to talk to them?

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

#227

Post by kalleboo » Wed, Aug 01, 2018, 9:13 AM UTC

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).

The EU legislated down card interchange fees to 0.2/0.3%. I imagine that helped drive the strong adoption of EMV/Chip+PIN and 3DSecure you see in Europe

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

#228

Post by kalleboo » Wed, Aug 01, 2018, 9:15 AM UTC

radicalbyte wrote: post #200

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)

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.

Conversely in Sweden all debit cards are VISA/MasterCard so credit cards work literally everywhere

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

#229

Post by daemin » Wed, Aug 01, 2018, 9:16 AM UTC

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…

Little story: I actually saw one employee at a fast food joint brazenly dig into the till and take a 20 out and put it into his pocket right in front of me. He wasn't a cashier but just someone that assembles the food product.

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

#230

Post by kalleboo » Wed, Aug 01, 2018, 9:28 AM UTC

m0rphy99 wrote: post #214

The penetration of credit cards into everyone's daily life is already too deep. Let's face it, at this point they already got everybody well locked up. Any attempts to resist from just a few companies here and there are really just futile.

Not really. Smartphone apps can be a game changer since they require so little infrastructure to adopt. Look at Venmo. In Sweden a banking revolution is taking place where an app similar to Venmo that instead was developed by a consortium of banks has quickly gotten mass adoption, recently also including at retail. I bought strawberries from a street stall using my phone.