Merchant Swipe Fees

[CreditScholar]

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@Open123 wrote:

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@Anonymous wrote:

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@b_seeker wrote:

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@cottoncrown wrote:
No they don't. I work for a major grocery chain, they all get lumped together. There is no difference. Why do you think that?

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http://usa.visa.com/download/merchants/visa-usa-interchange-reimbursement-fees-april2013.pdf

I would imagine because this document from Visa has different fee tiers. A major chain store like has deals in place with Visa for a flat rate % as well.

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This is also why a number of issuers are pushing Visa Signature/MC World cards to almost everyone.   They get higher swipe fees, presumably more than offsetting the increased cost of the benefits.

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+1

Once Merchants reached an agreenment to be allowed to charge different pricing for different Visa/Mc cards, I don't see why all Banks simply just offer Sign only cards.

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+2. This is why we're seeing a dilution of signature cards, since banks are pushing more customers into this space for the higher swipe fees (even if they really shouldn't qualify).

[nyancat]

What the merchants get charged depends on their processor / acquirer / aggregator. Interchange is what these banks and financial institutions get charged.

I use Square. I pay a swiped (qualified) rate of 2.75% and a keyed (non-qualified) rate of 15 cents + 3.5%. Pretty high, but no monthly fees and no per-transaction fee.

In some cases (debit cards with small transactions) Square is actually cheaper than the listed interchange rates...

[HiLine]

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@nyancat wrote:

What the merchants get charged depends on their processor / acquirer / aggregator. Interchange is what these banks and financial institutions get charged.

I use Square. I pay a swiped (qualified) rate of 2.75% and a keyed (non-qualified) rate of 15 cents + 3.5%. Pretty high, but no monthly fees and no per-transaction fee.

In some cases (debit cards with small transactions) Square is actually cheaper than the listed interchange rates...

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Hmm, so interchange fee is what Visa gets charged, not what they charge?

[Open123]

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@nyancat wrote:

I use Square. I pay a swiped (qualified) rate of 2.75% and a keyed (non-qualified) rate of 15 cents + 3.5%. Pretty high, but no monthly fees and no per-transaction fee.

In some cases (debit cards with small transactions) Square is actually cheaper than the listed interchange rates...

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I like places with Square and noticed they couldn't care less about my charging a small transaction with Amex. 

[nyancat]

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@HiLine wrote:

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@nyancat wrote:

What the merchants get charged depends on their processor / acquirer / aggregator. Interchange is what these banks and financial institutions get charged.

I use Square. I pay a swiped (qualified) rate of 2.75% and a keyed (non-qualified) rate of 15 cents + 3.5%. Pretty high, but no monthly fees and no per-transaction fee.

In some cases (debit cards with small transactions) Square is actually cheaper than the listed interchange rates...

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Hmm, so interchange fee is what Visa gets charged, not what they charge?

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No, interchange is what Visa charges, but that's not what the merchant ends up paying. Merchants (except some very large ones) do not contract directly with Visa/MC/Amex/Discover but with either an acquirer (traditional merchant account arrangement) or an aggregator (like Square, PayPal, Google Wallet). The acquirer/aggregator pays either the posted interchange rate or something they negotiate, but they charge you their rate, which is generally higher.

The reason those of us who use Square don't care about small transaction is Square charges a high percentage (2.75%) but no per-transaction fixed charge. So on a $1 transaction, we're charged 2.75 cents. A traditional merchant can easily be charged 30 cents on the same transaction!

On a $20 transaction, however, they get a much better deal, so I don't feel too bad for them