Instead of this they should look into adopting Apple Pay. Creating additional friction in payments is idiotic.
Credit-Card Backlash Mounts as Kroger Weighs Expanding Visa Ban
31–40 of 389 posts
Re: Credit-Card Backlash Mounts as Kroger Weighs Expanding Visa Ban
#32Earlier quoted context omitted.
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.
I think you would be surprised at how little cash many places need to operate with in the presence of credit cards.
Consider a front desk at a hotel. Thousands of dollars a day in transactions occur via card, which would warrant frequent drops into an expensive safe if they happened with cash. With cards they pretty much only hold a trivial amount to deal with sundries that isn't worth protecting beyond a simple envelope to a back-office.
Credit cards dominate many industries in the US to a point where cash management is now trivial because the daily amounts aren't worth any employee losing their job over or a criminal risking robbery punishment for.
Re: Credit-Card Backlash Mounts as Kroger Weighs Expanding Visa Ban
#33Earlier quoted context omitted.
So you hate getting something back for choosing one payment method over another when there's no indication that retail stores would lower their prices if credit cards (and their transaction fees) were wiped out?
At least those "$5.00 or $20.00 minimum for credit cards" signs that you see often in coffee places and bars will go away. They are probably illegal (or against contracts) in most states, but you see them very often.
> They are probably illegal (or against contracts) in most states, but you see them very often.
Minimum purchase requirements for credit cards were explicitly legalized in the US in 2010 as part of Dodd-Frank. Merchant agreements are not legally allowed to prohibit them.
Re: Credit-Card Backlash Mounts as Kroger Weighs Expanding Visa Ban
#34Earlier quoted context omitted.
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.?
Correct. The fee will vary within a network based on all sorts of things. There are low-rate carve outs for low-margin products (eg gasoline), discounts for "card-in-hand" transactions, and higher fees for premium cards.
https://www.helcim.com/us/visa-interchange-rates/
https://usa.visa.com/dam/VCOM/global/support-legal/documents...
Re: Credit-Card Backlash Mounts as Kroger Weighs Expanding Visa Ban
#35Earlier quoted context omitted.
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.
If you put down your loss due to clerical errors, theft, etc. of handling cash at around 1%, increasing the amount of cash will also increase your loss. Credit cards and other electronic payment methods, won't have that issue.
Re: Credit-Card Backlash Mounts as Kroger Weighs Expanding Visa Ban
#36Earlier quoted context omitted.
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.?
I seriously doubt the retailer pays different fees depending on th card. That sounds bizarre.
Re: Credit-Card Backlash Mounts as Kroger Weighs Expanding Visa Ban
#37Good? 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).
It's not subsidized by people who make interest payments?
Re: Credit-Card Backlash Mounts as Kroger Weighs Expanding Visa Ban
#38Earlier quoted context omitted.
I've found it very difficult to try to explain this well to people who aren't financially/numerically-inclined. The latest fad in Canada seems to be Paytm, which lets you pay (among various bills), your property taxes with your credit card.
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.
Not if you can get 3% cashback on a transaction while paying a 2.5% fee.
Re: Credit-Card Backlash Mounts as Kroger Weighs Expanding Visa Ban
#39Earlier quoted context omitted.
> 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.?
Correct. The fee will vary within a network based on all sorts of things. There are low-rate carve outs for low-margin products (eg gasoline), discounts for "card-in-hand" transactions, and higher fees for premium cards. https://www.helcim.com/us/visa-interchange-rates/ https://usa.visa.com/dam/VCOM/global/support-legal/documents...
Ohh.. so it's saying Visa CPS Retail vs. Visa Rewards Traditional vs. Visa Rewards Signature vs. etc. are different. Interesting, thanks, I didn't know that. But if I'm buying two of the same product (obviously -- I'm not talking about two gas vs. groceries here) with two different cards, both of which are from the same network and the same "kind" (by which I mean the categorizations listed above, like two that are both "Visa Rewards Signature"), then the merchant will pay the same fee, right? i.e. it's not like the mere fact that one pays 1% cash back and one pays 2% cash back could possibly result in a different charge to the merchant by itself if they're both (say) lumped together as Rewards Traditional?
Re: Credit-Card Backlash Mounts as Kroger Weighs Expanding Visa Ban
#40Earlier quoted context omitted.
> 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.?
I seriously doubt the retailer pays different fees depending on th card. That sounds bizarre.
The merchant absolutely pays different fees depending on the card. A Visa platinum card will cost more for the merchant than a basic, non-rewards card. Regardless of scale, different types of merchants also pay different fees.