topic Re: Visa, Mastercard Prepare to Raise Credit-Card Fees in Credit in the News

Visa, Mastercard Prepare to Raise Credit-Card Fees

Adkins — Thu, 10 Mar 2022 02:25:34 GMT

According to the WSJ :

"Though invisible to shoppers, interchange fees are a constant source of aggravation for merchants. Their interchange costs have ballooned in recent years along with the popularity of rewards credit cards, which typically carry higher fees to cover the cost of travel perks and other benefits. But the networks’ “honor all cards” rule means that a merchant who accepts one Visa credit card, for example, must accept all of them.

U.S. merchants paid card issuers an estimated $55.4 billion in Visa and Mastercard credit-card interchange fees in 2021, more than double the amount in 2012, according to the Nilson Report. They pass along at least some of these costs to the consumer in the form of higher prices. More merchants have started charging consumers extra when they pay with credit cards." ...

They are giving some discounts to merchants, like daycares and dining, or giving a break to other merchants that do less than $250K a year, but there are exceptions.

Re: Visa, Mastercard Prepare to Raise Credit-Card Fees

Anonymous — Thu, 10 Mar 2022 12:19:43 GMT

@Adkins

Following on this good information (thank you), I have noticed that the hair saloon, banker, butcher all have posted notices that they will add 3.9% to a credit card transaction for Visa or MasterCard. Get's better, my local city added 3.9% to using one of the two card networks for any payment transactions. All this started awhile back (summer 2021) and it seems to be spreading in my geographic area (the outback north land of the United States or if you prefer the frozen wilderness).

From my memory it used to be a comfort to merchants/vendors for consumers to use credit/debit cards as they did not have to worry about bad checks. Now the same merchants are offering consumers the ability to use paper checks in lieu of United States Currency or credit cards.

It appears from my front porch we are regressing in a world of digital electronic transactions?!

Re: Visa, Mastercard Prepare to Raise Credit-Card Fees

MasonK — Sat, 12 Mar 2022 00:25:07 GMT

@Anonymous wrote:
@Adkins

Following on this good information (thank you), I have noticed that the hair saloon, banker, butcher all have posted notices that they will add 3.9% to a credit card transaction for Visa or MasterCard. Get's better, my local city added 3.9% to using one of the two card networks for any payment transactions. All this started awhile back (summer 2021) and it seems to be spreading in my geographic area (the outback north land of the United States or if you prefer the frozen wilderness).

From my memory it used to be a comfort to merchants/vendors for consumers to use credit/debit cards as they did not have to worry about bad checks. Now the same merchants are offering consumers the ability to use paper checks in lieu of United States Currency or credit cards.

It appears from my front porch we are regressing in a world of digital electronic transactions?!

Interchange fees are not new, so I'm actually still surprised that so many merchants haven't baked that fee into their pricing.

As for that porch, I remember my Dad talking about using ATMs in the 80s and how the banks forced customers to the ATMs by charging a fee to use a human teller. Then in the 90s they started charging $2/transaction at the ATM and that forced people back to the tellers. It's just like credit vs. checks (which I suspect could make a comeback).

Re: Visa, Mastercard Prepare to Raise Credit-Card Fees

SoCalGardener — Thu, 17 Mar 2022 22:58:45 GMT

@MasonK wrote:
As for that porch, I remember my Dad talking about using ATMs in the 80s and how the banks forced customers to the ATMs by charging a fee to use a human teller. Then in the 90s they started charging $2/transaction at the ATM and that forced people back to the tellers. It's just like credit vs. checks (which I suspect could make a comeback).

No kidding! Over the last two years I've done some major renovation work at my house, including a new sprinkler/irrigation system, bathroom remodel, etc. NONE of the companies I've worked with--or talked to while figuring out who to work with--accepts credit cards. Not one. When I asked why they didn't, the most common reason was the extra expense involved in processing/accepting them. My checkbook has gotten quite a bit of use recently! If this keeps up, I'll need to reorder checks....for the first time in 10 years!

Re: Visa, Mastercard Prepare to Raise Credit-Card Fees

Anonymous — Thu, 17 Mar 2022 23:24:37 GMT

@SoCalGardener wrote:
@MasonK wrote:
As for that porch, I remember my Dad talking about using ATMs in the 80s and how the banks forced customers to the ATMs by charging a fee to use a human teller. Then in the 90s they started charging $2/transaction at the ATM and that forced people back to the tellers. It's just like credit vs. checks (which I suspect could make a comeback).
No kidding! Over the last two years I've done some major renovation work at my house, including a new sprinkler/irrigation system, bathroom remodel, etc. NONE of the companies I've worked with--or talked to while figuring out who to work with--accepts credit cards. Not one. When I asked why they didn't, the most common reason was the extra expense involved in processing/accepting them. My checkbook has gotten quite a bit of use recently! If this keeps up, I'll need to reorder checks....for the first time in 10 years!

Follow your posting completely! Did a lot of work with contractors on the house and not one would accept credit card (2017-2020).

Re: Visa, Mastercard Prepare to Raise Credit-Card Fees

SoCalGardener — Thu, 17 Mar 2022 23:47:11 GMT

@Anonymous wrote:
@SoCalGardener wrote:
@MasonK wrote:
As for that porch, I remember my Dad talking about using ATMs in the 80s and how the banks forced customers to the ATMs by charging a fee to use a human teller. Then in the 90s they started charging $2/transaction at the ATM and that forced people back to the tellers. It's just like credit vs. checks (which I suspect could make a comeback).
No kidding! Over the last two years I've done some major renovation work at my house, including a new sprinkler/irrigation system, bathroom remodel, etc. NONE of the companies I've worked with--or talked to while figuring out who to work with--accepts credit cards. Not one. When I asked why they didn't, the most common reason was the extra expense involved in processing/accepting them. My checkbook has gotten quite a bit of use recently! If this keeps up, I'll need to reorder checks....for the first time in 10 years!
Follow your posting completely! Did a lot of work with contractors on the house and not one would accept credit card (2017-2020).

It's weird, right?! I was absolutely shocked as I found out no one takes CCs for such major jobs. I mean, shoot, do they expect everyone to just have access to tons of cash for major projects like that?

Sure, there are companies that do take CCs, but I was using personal referrals to hone in on just the right company for each job--with very specific requirements, like a strong and LONG reputation in my immediate area, neighbors who could vouch for their workmanship and quality, etc. It just so happened that all the companies I narrowed my list down to didn't take CCs!

Re: Visa, Mastercard Prepare to Raise Credit-Card Fees

805orbust — Sat, 19 Mar 2022 17:41:13 GMT

Extra cost... theyre crazy. Theyre probably just worried about being charged back if they screw up. Wow... never thought about that before. Heck, just charge the fee, or something... it ain't THAT much!

Re: Visa, Mastercard Prepare to Raise Credit-Card Fees

kilroy8 — Sat, 19 Mar 2022 22:56:26 GMT

I probably average 4% catback when looking at all card usage.

So a fee would be a wash, really.

Bankers not making much off of me.

Re: Visa, Mastercard Prepare to Raise Credit-Card Fees

ChargedUp — Tue, 29 Mar 2022 03:35:25 GMT

I'm having this bizarre vision of small retail establishments preferring Amex and Discover all of a sudden...

Re: Visa, Mastercard Prepare to Raise Credit-Card Fees

ThomasJNewton — Tue, 29 Mar 2022 04:02:53 GMT

@805orbust wrote:
Extra cost... theyre crazy. Theyre probably just worried about being charged back if they screw up. Wow... never thought about that before. Heck, just charge the fee, or something... it ain't THAT much!

From having done a lot of construction projects, this is a major reason many do not take credit cards (sometimes when they are at fault and sometimes when they are not). An other reason common reason is accounting (many prefer real cash, but checks are still easier than credit cards which automatically report).

Re: Visa, Mastercard Prepare to Raise Credit-Card Fees

Anonymous — Tue, 29 Mar 2022 06:22:59 GMT

@kilroy8

We will charge you off as being frugal" ...

Re: Visa, Mastercard Prepare to Raise Credit-Card Fees

wasCB14 — Thu, 31 Mar 2022 00:20:33 GMT

I've definitely had more than my share of dishonest and incompetent contractors, but from an accounting standpoint I can kind of see where they come from.

If you have 1000 customers a week each spend $10 on average, dealing with that many checks would be a hassle and cards are a convenience. But if you have one person a week spending $10000, taking two minutes to mobile deposit a check is worth saving ~$300 in fees. And it's simple, with people paying the same way.

I could let tenants pay by CC for a 3.5% fee, but:

1. I doubt any of them are consistently getting 3.5% cash back. I've seen their credit reports.

2. It took effort to get some people away from their old practice of meeting in person at inconsistent and irregular times so they could pay cash. Not everyone leaving the stone age is necessarily ready for the 21st century. Setting up a portal for electronic payment isn't worth the complexity on the small scale when not everyone will use it.

Re: Visa, Mastercard Prepare to Raise Credit-Card Fees

gdale6 — Thu, 31 Mar 2022 15:17:19 GMT

@Anonymous wrote:
@Adkins

Following on this good information (thank you), I have noticed that the hair saloon, banker, butcher all have posted notices that they will add 3.9% to a credit card transaction for Visa or MasterCard. Get's better, my local city added 3.9% to using one of the two card networks for any payment transactions. All this started awhile back (summer 2021) and it seems to be spreading in my geographic area (the outback north land of the United States or if you prefer the frozen wilderness).

From my memory it used to be a comfort to merchants/vendors for consumers to use credit/debit cards as they did not have to worry about bad checks. Now the same merchants are offering consumers the ability to use paper checks in lieu of United States Currency or credit cards.

It appears from my front porch we are regressing in a world of digital electronic transactions?!

I dont do business with anyone adding a CC surcharge. Its not widely done around here at this point.

Re: Visa, Mastercard Prepare to Raise Credit-Card Fees

Anonymous — Fri, 01 Apr 2022 01:57:59 GMT

@gdale6 wrote:
@Anonymous wrote:
@Adkins

Following on this good information (thank you), I have noticed that the hair saloon, banker, butcher all have posted notices that they will add 3.9% to a credit card transaction for Visa or MasterCard. Get's better, my local city added 3.9% to using one of the two card networks for any payment transactions. All this started awhile back (summer 2021) and it seems to be spreading in my geographic area (the outback north land of the United States or if you prefer the frozen wilderness).

From my memory it used to be a comfort to merchants/vendors for consumers to use credit/debit cards as they did not have to worry about bad checks. Now the same merchants are offering consumers the ability to use paper checks in lieu of United States Currency or credit cards.

It appears from my front porch we are regressing in a world of digital electronic transactions?!
I dont do business with anyone adding a CC surcharge. Its not widely done around here at this point.

However, in a small area where vendors are few and sparse ... the option of walking away is not always the answer. Do not desire to drive 60 miles to patronize a vendor that takes cards.

Re: Visa, Mastercard Prepare to Raise Credit-Card Fees

lns1976 — Sun, 10 Apr 2022 18:21:01 GMT

@ChargedUp Discover maybe, but Amex no. Amex has always had the highest processing rates in the industry. The amount of business who will take everything "except" Amex is pretty large.

Discover is usually within 1/2 a percent of MasterCard/Visa, Amex tends to be 2% to even upwards of 5% higher at times than MasterCard or Visa.

Re: Visa, Mastercard Prepare to Raise Credit-Card Fees

Brian_Earl_Spilner — Sun, 10 Apr 2022 18:30:50 GMT

@805orbust wrote:
Extra cost... theyre crazy. Theyre probably just worried about being charged back if they screw up. Wow... never thought about that before. Heck, just charge the fee, or something... it ain't THAT much!

Adding a cc surcharge could be a breach of the cc agreement. It's why places like gas stations offer a "discount" for paying cash or debit.

Re: Visa, Mastercard Prepare to Raise Credit-Card Fees

Brian_Earl_Spilner — Sun, 10 Apr 2022 18:32:59 GMT

@lns1976 wrote:
@ChargedUp Discover maybe, but Amex no. Amex has always had the highest processing rates in the industry. The amount of business who will take everything "except" Amex is pretty large.

Discover is usually within 1/2 a percent of MasterCard/Visa, Amex tends to be 2% to even upwards of 5% higher at times than MasterCard or Visa.

Visa infinite and MasterCard world elite cards charge higher fees than Amex and have been for a while.

Re: Visa, Mastercard Prepare to Raise Credit-Card Fees

lns1976 — Sun, 10 Apr 2022 18:45:42 GMT

@Brian_Earl_Spilner Running businesses I've never experienced "discrepancies" in the fees I pay based on the Visa or Mastercard presented. The rate for Visa or Mastercard by the "Processors" has always been the same charge based on the network of the card.

That being said, the processor is probably balancing that amount just like Amex does in their rates.

On average I've experienced and seen 1.5% to 3.5% as the high for Visa/Mastercard processing, 2.0% to 4% for Discover, and 2.5% to 7% for Amex depending on the business, online vs offline, etc... Along with your typical "per transaction fee".

But I've also never seen the rate breakdowns for million dollar/year companies. All the companies I've ever ran/worked with were smaller businesses using CC processing companies or local banks for processing.

Re: Visa, Mastercard Prepare to Raise Credit-Card Fees

lns1976 — Sun, 10 Apr 2022 18:46:52 GMT

Here's the average rates for business processing as well, Amex still the highest.

https://www.fool.com/the-ascent/research/average-credit-card-processing-fees-costs-america/

Re: Visa, Mastercard Prepare to Raise Credit-Card Fees

SOGGIE — Tue, 12 Apr 2022 22:50:49 GMT

@Anonymous wrote:
@SoCalGardener wrote:
@MasonK wrote:
As for that porch, I remember my Dad talking about using ATMs in the 80s and how the banks forced customers to the ATMs by charging a fee to use a human teller. Then in the 90s they started charging $2/transaction at the ATM and that forced people back to the tellers. It's just like credit vs. checks (which I suspect could make a comeback).
No kidding! Over the last two years I've done some major renovation work at my house, including a new sprinkler/irrigation system, bathroom remodel, etc. NONE of the companies I've worked with--or talked to while figuring out who to work with--accepts credit cards. Not one. When I asked why they didn't, the most common reason was the extra expense involved in processing/accepting them. My checkbook has gotten quite a bit of use recently! If this keeps up, I'll need to reorder checks....for the first time in 10 years!
Follow your posting completely! Did a lot of work with contractors on the house and not one would accept credit card (2017-2020).

@Anonymous I am dealing with the same issue right now (no contractor accepting CC for home repairs/renovations). They say they'll take checks, Venmo, CashApp or cash/cash equivalent. Okay! Then I will pay by money order and I supply the materials using Lowe's card to avoid overpaying any markup on materials. While it seems that more vendors are willing to accept checks, I'm not as comfortable writing them to certain people as I once was years ago. Seems as though the cc fees are causing more problems for consumers.