topic Re: Transaction Fees and Credit Card Company Profits in General Credit Topics

Transaction Fees and Credit Card Company Profits

veracious — Wed, 08 Jun 2011 23:52:45 GMT

I apologize for asking a dull question, I couldn't find a similar thread on the board.

I'd like to know how CCC's look at multiple transaction usage or large transaction usage.

Which is more profitable to CCC's ?

Is each transaction fee charged to a merchant the same regardless of the size of the transaction?.

Which method of usage do CCC's prefer, large transactions or multiple small transactions.?

Re: Transaction Fees and Credit Card Company Profits

Anonymous — Thu, 09 Jun 2011 03:37:41 GMT

They charge the merchants a set percentage of their sales, so number of transactions does not matter to them.

Re: Transaction Fees and Credit Card Company Profits

Anonymous — Thu, 09 Jun 2011 03:47:57 GMT

@veracious wrote:
I apologize for asking a dull question, I couldn't find a similar thread on the board.

I'd like to know how CCC's look at multiple transaction usage or large transaction usage.

Which is more profitable to CCC's ?
Is each transaction fee charged to a merchant the same regardless of the size of the transaction?.

Which method of usage do CCC's prefer, large transactions or multiple small transactions.?

Merchants are generally charged a relatively small per transaction fee plus a percentage of the total. For example, every swipe costs them 25 cents plus 2% of the total.

Re: Transaction Fees and Credit Card Company Profits

veracious — Thu, 09 Jun 2011 16:25:08 GMT

Thanks, 06.

Your answer was what I was looking for.

I always wondered if merchants were charged a percentage of each sale when customers purchase with a CC.

Re: Transaction Fees and Credit Card Company Profits

Anonymous — Thu, 09 Jun 2011 23:39:52 GMT

@veracious wrote:
Thanks, 06.

Your answer was what I was looking for.
I always wondered if merchants were charged a percentage of each sale when customers purchase with a CC.

There may be exceptions to the rule, but most are. It's generally a flat charge per swipe / approval plus a small percentage of the total.

Each merchant negotiates different numbers with their processor which may involve caps or other sweetheart deals, though.

Re: Transaction Fees and Credit Card Company Profits

Anonymous — Fri, 10 Jun 2011 07:09:35 GMT

That's why many of small businesses are asking customers to pay in cash if the total due is less than $10.

Re: Transaction Fees and Credit Card Company Profits

awal — Fri, 10 Jun 2011 23:57:11 GMT

All of the gas stations in my area have started offering a Cash Price vs Credit Price. If they are wiling to pass on some of those savings to the consumer, I'm all for going to the ATM machine and withdrawing a a bucks to save a couple dollars every full up. I wish more places had that kind of pricing model...