PIF profits

[Anonymous]

Other than Amex.  Do other CCC profit more from PIFers? Also, how high are the Discover transaction fees to merchants?

[Creditaddict]

Discover costs me almost as much as amex

[Anonymous]

They do profit from transaction fees.  I own my own busines and find that the fees go like this in order of least to most expensive to the merchant:

Visa/MC Debit

Visa/MC

Visa/MC Rewards Cards

Visa/MC Corporate Cards

Discover

Amex

I can't quote you exact fees because that depends on the individual plan of the business through their merchant account bank. Smaller companies, like mine, pay a larger fee, and bigger companies with more revenue obviously can negotiate better fees, so they pay less, though the standard throughout the industry is that discover and amex do charge the merchant more, merchants pay more for rewards cards (so in essence the merchant you are shopping it at is paying a good chunk of your rewards, not the bank that issues the card).

Amex is it's own animal though, for example, they charge an additional monthly fee just for the merchants to accept their cards, plus per transaction and % of the sales fees are higher. I get billed for visa/mc/discover transactions on one bill and amex bills me all on their own.

[Creditaddict]

Upupup, you sound like you process about as much as me (not much) I use to be on the same plan with amex, you pay monthly fee and get lower transaction fee %... however that does not work out in your favor if you process say less than $50 month in amex... you can call amex and switch to pay per swipe plan (3.25%) with no min. etc.  Works out much better for me, might want to look into it.

another note, when I switched plans amex gave me back fees for like 4 months saying very sorry I was on wrong plan and hope you continue doing business with us!!!!

[Anonymous]

So, whats the process when I pay in full?  Do the card companies receive my money before they pay the merchant? Is that how they benefit from PIFers?

[Creditaddict]

no when I process a credit card, it's in my bank account within 24 hours

[Anonymous]

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Creditaddict wrote:

Upupup, you sound like you process about as much as me (not much) I use to be on the same plan with amex, you pay monthly fee and get lower transaction fee %... however that does not work out in your favor if you process say less than $50 month in amex... you can call amex and switch to pay per swipe plan (3.25%) with no min. etc.  Works out much better for me, might want to look into it.

another note, when I switched plans amex gave me back fees for like 4 months saying very sorry I was on wrong plan and hope you continue doing business with us!!!!

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I process a good amount of Amex transactions, many of my clients are boutique type clientele and many of them use their amex cards. I do actually push a decent amount (for a small business owner) through my merchant account, I just am not pulling the numbers that let's say Target or Best Buy is doing, nor will I ever be that big, so I'll never have that big boy negotiating power. It's okay though, I've worked out the fees over the past few years, and I'm doing pretty good. I've had a few companies call and offer me their rates and so far, no one has been able to beat what I'm at.  Thank you so much though for looking out for me. I really appreciate it. 

[Anonymous]

So how does PIF make them more money?

[Anonymous]

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Creditaddict wrote:

no when I process a credit card, it's in my bank account within 24 hours

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Ditto!  PIF doesn't affect the merchants you shop at, that's between you and the card issuing bank. Thus the reason you pay interest to the credit card bank if you don't PIF. They need to get their money somewhere...if they are paying your bills and waiting to get paid from you in monthly installments, they aren't going to do it for free.

[Anonymous]

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turbowrx wrote:

So how does PIF make them more money?

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No one said it does.