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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

#41

Post by oasisbob »

deelowe wrote: post #36
mehrdadn wrote: post #28

Earlier 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.

It's going to depend on how the retailer's contract with their merchant account works. Your mom and pop store may just pay a higher rate, and a high txn fee and call it a day. Simple contract.

For a large retailer like Kroger, there's no way in hell they're leaving all the interchange discounts on the table.

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

#42

Post by majormajor »

Bramble wrote: post #11
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.

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?

There is some indication of that - gas stations have seemed to be leading the push here, with "cash-only" prices, but you'll also see places with CC fees or minimums (as much as the providers try to crack down on this).

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

#43

Post by cycrutchfield »

jimmaswell wrote: post #37
ThrustVectoring wrote: post #20

Earlier 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).

It's not subsidized by people who make interest payments?

Oh, it is. Very much so.

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

#44

Post by cycrutchfield »

anamexis wrote: post #22
mehrdadn wrote: post #19

Earlier quoted context omitted.

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

They're typically 2.5 - 3.5%.

You can pay your federal income taxes via credit card for 1.87%

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

#45

Post by function_seven »

deelowe wrote: post #36
mehrdadn wrote: post #28

Earlier 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.

They do.

https://www.helcim.com/us/visa-interchange-rates/

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

#46

Post by ThrustVectoring »

jimmaswell wrote: post #37
ThrustVectoring wrote: post #20

Earlier 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).

It's not subsidized by people who make interest payments?

Not really. Banks really dislike creating systems where it is possible for them to lose money. And by law, if you pay your credit card statement in full on or before the due date, you get charged zero interest.

The interchange fees charged to merchants roughly covers rewards. It's why Visa et al charge higher fees to merchants for processing higher-tier rewards cards. Interchange fees don't cover all the other overhead of running a credit card system, but they do cover rewards.

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

#47

Post by rosege »

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.

Or just work the system - I made around $6000AUD from points in the last 12 months. Its pretty minimal work. Sign up for card. Fulfil requirements to get sign-on points then cancel and move onto the next card. Your credit rating takes a bit of a hit but recovers over time.

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

#48

Post by cycrutchfield »

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.

Swipe fees are not a problem that the average consumer cares about at all.

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

#49

Post by cycrutchfield »

rosege wrote: post #47
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.

Or just work the system - I made around $6000AUD from points in the last 12 months. Its pretty minimal work. Sign up for card. Fulfil requirements to get sign-on points then cancel and move onto the next card. Your credit rating takes a bit of a hit but recovers over time.

You credit rating can actually in some cases get better, believe it or not.

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

#50

Post by Dwolb »

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?

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.

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