topic Re: How much are AmEx swipe charges? MC and Visa? in Credit Cards

How much are AmEx swipe charges? MC and Visa?

Gregory1776 — Sat, 19 Aug 2017 22:47:34 GMT

Re: How much are AmEx swipe charges? MC and Visa?

Anonymous — Sat, 19 Aug 2017 23:19:39 GMT

Not sure if I'm allowed to post the source, but here is what I found:

Visa: 1.43-2.4%

MC: 1.55-2.6%

Discover: 1.56-2.3%

Amex: 2.5-3.5%

Same source also says that due to these fees, the average family loses around $400 per year. I guess this means to break even you need to make at least $400 in rewards.

Re: How much are AmEx swipe charges? MC and Visa?

Gregory1776 — Sat, 19 Aug 2017 23:37:39 GMT

@Anonymous wrote:
Not sure if I'm allowed to post the source, but here is what I found:

Visa: 1.43-2.4%
MC: 1.55-2.6%
Discover: 1.56-2.3%
Amex: 2.5-3.5%

Same source also says that due to these fees, the average family loses around $400 per year. I guess this means to break even you need to make at least $400 in rewards.

Whoa... pm me the source...

Re: How much are AmEx swipe charges? MC and Visa?

K-in-Boston — Sun, 20 Aug 2017 00:07:42 GMT

Those fees don't repreesent the full range for the card networks and the answer to the original question is quite complex. Most merchants don't understand the fee structures and this is why credit card processors make money hand over fist. Depending on whether a merchant is paying a tiered amount depending on the card type (usually represented as well-qualified, qualified and non-qualified - this is a horrible setup for a merchant BTW) or whether they are smart enough to have signed up for Interchange+ pricing and negotiated the "+" part of that will determine where the Visa, MasterCard and Discover network cards end up. With Amex, things get complicated because a merchant either deals directly with Amex to negotiate a flat amount (% and per-transaction cents) for all Amex cards, or they can now sign up for the OptBlue program through their credit card processor - and the retail rate grid for those are all over the board depending on the type of merchant, the amount of the transaction and the additional charges that the processor adds.

Again, it is a quite complex answer. Debit cards can be a significantly lower percentage thanks to the Durbin Amendment. There are fixed price processors, too. PayPal and Square for instance make their money because they charge you the same price for all card types. There are plenty of transactions where a MasterCard or Visa could be near 4% cost to the merchant and without looking at a complete month's worth of a particular merchant's credit card statement(s), there is no way to give a "swipe charge" percent. And that's not even getting into things like AVS and EIRF...

Re: How much are AmEx swipe charges? MC and Visa?

fltireguy — Sun, 20 Aug 2017 00:56:49 GMT

As K said, that's only part of the picture. There is also usually a transaction fee, which can be 10-25 cents per transaction on top of the discount rate. REWARDS CARDS AND CORPORATE PURCHASING CARDS can be significantly higher as well (discount rate). Also, AMEX can be EXTREMELY competitive in some cases, coming in at under the MC/Visa rates. Discover will generally match a merchants MC/Visa rate as well..

Also do t forget that cash transactions DO have a cost associated with them as well - at my business a cash transaction probably costs me 2-3x what a credit card does due to the time it takes to go to the bank on a daily basis etc

Re: How much are AmEx swipe charges? MC and Visa?

Anonymous — Sun, 20 Aug 2017 01:04:05 GMT

Good post by K. Some times there are co-op and trade groups to get lower swipe fees. DW and I once owned a biz that took in over 40K a month in card charges and about the same in private billing. We were members of a co-op that got 1.2% for visa, mc, discover and 2% Amex and settled every M, W,F. It was cheaper for us to take credit cards than to send the clients a statement in many cases.

Re: How much are AmEx swipe charges? MC and Visa?

creditfan — Sun, 20 Aug 2017 01:50:59 GMT

thank you for popping up this topic

@Anonymous wrote:
Good post by K. Some times there are co-op and trade groups to get lower swipe fees. DW and I once owned a biz that took in over 40K a month in card charges and about the same in private billing. We were members of a co-op that got 1.2% for visa, mc, discover and 2% Amex and settled every M, W,F. It was cheaper for us to take credit cards than to send the clients a statement in many cases.

do you know how can one be part of co-op or trade groups to get lower swipe fees? hopefully I may save some $$$ if I decided to open a biz sometimes in the future

thanks

Re: How much are AmEx swipe charges? MC and Visa?

Anonymous — Sun, 20 Aug 2017 02:26:59 GMT

Each type of biz has their own trade associations. Fo example in the current business we are now there are two main issues for most owners 1) being sued even though you are just a subcontractor 2) retirement plannning as most members are over 55. The association as a perk has a class on being able to defend judgements and a guy helping you set up for IRA and other retirement plans When we owned the biz that sold widgets we joined the world wide widget association. It cost a very little. They had all kinds of classes to help sell more widgets and how to keep the cost down on widgets They also had a co-op for credit card clearing. We figure the card clearing saved us a bundle. Another biz we owned was in a high income zip code. At that time Visa owned a card processor themselves that went after high ticket biz locations. We just opened our doors and Visa walked in one day uninvited and offered us card clearing for under 2% for all swipes Visa, Mc, Discover and Amex. We could not believe it but verified and signed even though we did not take much biz with credit cards.

Re: How much are AmEx swipe charges? MC and Visa?

Anonymous — Sun, 20 Aug 2017 05:16:23 GMT

The only way it costs the average family $400 yearly is if the retailer tacks its losses back onto the price of the items they sell.

The CC holders who PIF each month pays no interests whatsoever.

Whatever Visa, MC and AmEx charge to swipe cards at retailers has no correlation to the people who PIF unless those retailers jack up the price of their goods to recover the costs.

AmEx sucks. The greediest of all CCs. People want an AmEx for prestige. Many businesses do not accept AmEx due to swiping fees. Nobody wins doing business with AmEx.

Re: How much are AmEx swipe charges? MC and Visa?

Anonymous — Sun, 20 Aug 2017 06:38:01 GMT

@Anonymous wrote:
The only way it costs the average family $400 yearly is if the retailer tacks its losses back onto the price of the items they sell.

The CC holders who PIF each month pays no interests whatsoever.

Whatever Visa, MC and AmEx charge to swipe cards at retailers has no correlation to the people who PIF unless those retailers jack up the price of their goods to recover the costs.

AmEx sucks. The greediest of all CCs. People want an AmEx for prestige. Many businesses do not accept AmEx due to swiping fees. Nobody wins doing business with AmEx.

Who's to say that they aren't already doing that by raising prices for everyone? Unfortunately, it's unlikely that prices will go down if everyone starts surcharging since we're apparently okay with paying what we're paying now.

Re: How much are AmEx swipe charges? MC and Visa?

digitek — Sun, 20 Aug 2017 12:41:38 GMT

Yeah I'm pretty sure that most merchants actually bake the CC swipe fee cost into the transaction. Effectively raising the cost of the product to everyone. If the person pays cash they get a higher percentage of profits, but they can't make it one price and then charge EXTRA if you use a CC.

It really is a racket. LIke consumer extortion. It is bad for everyone involved. I don't actually "save" money by using credit cards and getting rewards back, I am getting the normal price. The CC companies get the difference just for middle manning the transaction.

I have money in my bank, I would rather pay a merchant that money directly. The way that CC companies and payment networks work now, is that it is now actually cheaper for me to have a bank loan me the money for a few days (put in on a CC) and then pay the bank back the money a few days later.

smh......

Re: How much are AmEx swipe charges? MC and Visa?

fltireguy — Sun, 20 Aug 2017 12:46:45 GMT

@digitek wrote:
Yeah I'm pretty sure that most merchants actually bake the CC swipe fee cost into the transaction. Effectively raising the cost of the product to everyone. If the person pays cash they get a higher percentage of profits, but they can't make it one price and then charge EXTRA if you use a CC.

Oh yes they can!

Re: How much are AmEx swipe charges? MC and Visa?

fltireguy — Sun, 20 Aug 2017 12:50:09 GMT

@Anonymous wrote:
The only way it costs the average family $400 yearly is if the retailer tacks its losses back onto the price of the items they sell.

The CC holders who PIF each month pays no interests whatsoever.

Whatever Visa, MC and AmEx charge to swipe cards at retailers has no correlation to the people who PIF unless those retailers jack up the price of their goods to recover the costs.

AmEx sucks. The greediest of all CCs. People want an AmEx for prestige. Many businesses do not accept AmEx due to swiping fees. Nobody wins doing business with AmEx.

I'll disagree on Amex. Before I sold my business, I was paying 1.69%+ .17 transaction fee for mc/visa, with an average sale of $20. Amex was 1.95% with no trans fee. As a merchant, I loved Amex!!

Re: How much are AmEx swipe charges? MC and Visa?

K-in-Boston — Sun, 20 Aug 2017 13:07:48 GMT

@Anonymous wrote:
AmEx sucks. The greediest of all CCs. People want an AmEx for prestige. Many businesses do not accept AmEx due to swiping fees. Nobody wins doing business with AmEx.

Businesses who do not accept Amex don't do so due to the perception that Amex fees are higher. You used to have to negotiate rates directly with Amex and unless you were an established business with high volume, low risk, and decent negotiating skills you would usually get hit with something like 5 cents plus 3.5%. Those rates can go much lower direct ( in fact for most $500+ transactions we get, Amex fees are lower than on Visa and MasterCard). For everyone else doing a million or less in annual Amex volume, there is OptBlue. Most industries will find that the Amex rates are essentially the same as other card networks that way, unless your card processor charges you higher rates on top of the retail rate grid (discount percent and per transaction fees) - and this does happen often because they will tell the merchant "everyone knows Amex costs more." It doesn't but they use this misconception to their advantage to make more from the merchant. There is also the fact that Amex transactions are usually significantly higher than other card types. Even if I were paying 2.5% on average for other networks and 3.5% for Amex, I would much rather pay the extra 1% on a $45 sale than a $25 sale.

Re: How much are AmEx swipe charges? MC and Visa?

creditfan — Sun, 20 Aug 2017 14:50:05 GMT

@fltireguy wrote:
@Anonymous wrote:
The only way it costs the average family $400 yearly is if the retailer tacks its losses back onto the price of the items they sell.

The CC holders who PIF each month pays no interests whatsoever.

Whatever Visa, MC and AmEx charge to swipe cards at retailers has no correlation to the people who PIF unless those retailers jack up the price of their goods to recover the costs.

AmEx sucks. The greediest of all CCs. People want an AmEx for prestige. Many businesses do not accept AmEx due to swiping fees. Nobody wins doing business with AmEx.
I'll disagree on Amex. Before I sold my business, I was paying 1.69%+ .17 transaction fee for mc/visa, with an average sale of $20. Amex was 1.95% with no trans fee. As a merchant, I loved Amex!!

I were once work for a credit card processor company as a saleperson for a few months. The lowest I can give to my customer was; interchange 1.0% + $0.8 transaction fee for MC/VS/DC, and 1.0% + $.010 for Amex with at least 1 year contract

Re: How much are AmEx swipe charges? MC and Visa?

mitchblue — Sun, 20 Aug 2017 15:09:23 GMT

@fltireguy wrote:
@digitek wrote:
Yeah I'm pretty sure that most merchants actually bake the CC swipe fee cost into the transaction. Effectively raising the cost of the product to everyone. If the person pays cash they get a higher percentage of profits, but they can't make it one price and then charge EXTRA if you use a CC.

Oh yes they can!

What do you mean? Someone at the grocery story pays $1.99 for a loaf of bread with cash but I pay $2.04 with a CC? I don't understand.

Re: How much are AmEx swipe charges? MC and Visa?

Anonymous — Sun, 20 Aug 2017 15:13:33 GMT

@mitchblue wrote:
@fltireguy wrote:
@digitek wrote:
Yeah I'm pretty sure that most merchants actually bake the CC swipe fee cost into the transaction. Effectively raising the cost of the product to everyone. If the person pays cash they get a higher percentage of profits, but they can't make it one price and then charge EXTRA if you use a CC.

Oh yes they can!
What do you mean? Someone at the grocery story pays $1.99 for a loaf of bread with cash but I pay $2.04 with a CC? I don't understand.

Around here some of the smaller businesses will charge 25-50c extra if you use a card and the amount is under $5-10. I don't see flat percentage surcharging regardless of the amount all that often.

Re: How much are AmEx swipe charges? MC and Visa?

mitchblue — Sun, 20 Aug 2017 15:16:28 GMT

@Anonymous wrote:
@mitchblue wrote:
@fltireguy wrote:
@digitek wrote:
Yeah I'm pretty sure that most merchants actually bake the CC swipe fee cost into the transaction. Effectively raising the cost of the product to everyone. If the person pays cash they get a higher percentage of profits, but they can't make it one price and then charge EXTRA if you use a CC.

Oh yes they can!
What do you mean? Someone at the grocery story pays $1.99 for a loaf of bread with cash but I pay $2.04 with a CC? I don't understand.
Around here some of the smaller businesses will charge 25-50c extra if you use a card and the amount is under $5-10. I don't see flat percentage surcharging regardless of the amount all that often.

Really. Not sure I like that. But I don't usually go to smaller business's. Still seems kind of shady.

Re: How much are AmEx swipe charges? MC and Visa?

Anonymous — Sun, 20 Aug 2017 15:27:56 GMT

It really depends on your business, the annual revenue, amount accepted through credit cards, your merchant services provider, etc. For example, my business is charged a flat 1.79%+15¢ for all networks, including American Express.

Re: How much are AmEx swipe charges? MC and Visa?

Anonymous — Sun, 20 Aug 2017 15:32:37 GMT

One thing I noticed is how some biz don't seem to care as much as others what they pay in swipe fees. The regional regulatory board for our type of work uses square D and pays 2.5% I believe or 3% but their average swipe is over $1,000. My Jeep repair guy uses square D any pays 3%. My appliance repair co uses a local bank and pays 4% and does not take Amex. He has very low credit card use. The IRS has several options with one I pay under 2% but get 2% cash back if I use my Citi Double Cash card.

When we had a biz open to the public is was cheaper for us to take credit cards than mail statements out or deal with cash and or returned checks.