Established Contributor
Posts: 855
Registered: ‎06-29-2010
Re: Merchants may be allowed to charge extra for credit cards

bettercreditguy1 wrote:

I am a merchant and also a cc user. Rewards cards cost the merchant more as the Merchant pays the cash back/ extra rewards from his profit, not the cc card issuer. This is why people whom have a Titanium Card (really high limits) can not use a charge card for new automobile purchase.  Example, a 5% cash rewards on a  $50,000. car would be a hit in the amount of $ 2500. just for the reward portion plus the transaction fees, etc. The merchant also must adhere to cc card isuer guidlines and soon will be required to upgrade swipe card readers to read the new implant chips. New swipe card terminals can approach  $700.00 each. Pros and cons of each payment media were discussed earlier. However, it is almost safely impossible to carry enough cash to pay for gasoline, a back to the school trip at the mall, a week long vacation, etc. The other item not discussed is when a merchant accepts a cc for a payment, there is a waiting period of up to five days before those funds are transferred to the merchant account thus creating a float or short term loan.


You were probably misinformed about how the rewards work. Yes, certain premium cards do have higher swipe fees (and these cards usually pay higher rewards); however, you would never pay for 5% cashback though -- the merchant doesn't directly pay for any rewards:

 

http://usa.visa.com/download/merchants/visa-usa-interchange-reimbursement-fees-june2012.pdf