Merchant Swipe Fees

[Open123]

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@Anonymous wrote:

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@b_seeker wrote:

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@cottoncrown wrote:
No they don't. I work for a major grocery chain, they all get lumped together. There is no difference. Why do you think that?

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http://usa.visa.com/download/merchants/visa-usa-interchange-reimbursement-fees-april2013.pdf

I would imagine because this document from Visa has different fee tiers. A major chain store like has deals in place with Visa for a flat rate % as well.

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This is also why a number of issuers are pushing Visa Signature/MC World cards to almost everyone.   They get higher swipe fees, presumably more than offsetting the increased cost of the benefits.

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+1

Once Merchants reached an agreenment to be allowed to charge different pricing for different Visa/Mc cards, I don't see why all Banks simply just offer Sign only cards.

[Anonymous]

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@cottoncrown wrote:
No they don't. I work for a major grocery chain, they all get lumped together. There is no difference. Why do you think that?

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Because it's the truth. As someone else said, your company just happens to have negotiated a flat rate for Visa cards, but that's an exception and not the rule. Do you happen to work for Safeway?

[Open123]

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@Anonymous wrote:

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@cottoncrown wrote:
No they don't. I work for a major grocery chain, they all get lumped together. There is no difference. Why do you think that?

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Because it's the truth. As someone else said, your company just happens to have negotiated a flat rate for Visa cards, but that's an exception and not the rule. Do you happen to work for Safeway?

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Don't mean to derail the thread, but for the Safeways of the world, would their flat rate be the same for Visa, MC, Dis and Amex? 

[Anonymous]

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@Open123 wrote:

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@Anonymous wrote:

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@cottoncrown wrote:
No they don't. I work for a major grocery chain, they all get lumped together. There is no difference. Why do you think that?

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Because it's the truth. As someone else said, your company just happens to have negotiated a flat rate for Visa cards, but that's an exception and not the rule. Do you happen to work for Safeway?

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Don't mean to derail the thread, but for the Safeways of the world, would their flat rate be the same for Visa, MC, Dis and Amex? 

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It depends how they negotiate things, but unlikely.

[ramblin_wreck08]

I guess I'm not doing small businesses any favors when I pay with Visa or MasterCard instead of AMEX then, as I carry a Visa Sig and World MC in addition to my AMEX. It's ironic that the people who are likely to spend more are also the ones who cut more into the profit margin. But if I were a business owner I'd rather have 2% of a $100 purchase than 3% of a $50 purchase anyway.

[HiLine]

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@ramblin_wreck08 wrote:
I guess I'm not doing small businesses any favors when I pay with Visa or MasterCard instead of AMEX then, as I carry a Visa Sig and World MC in addition to my AMEX. It's ironic that the people who are likely to spend more are also the ones who cut more into the profit margin. But if I were a business owner I'd rather have 2% of a $100 purchase than 3% of a $50 purchase anyway.

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I think Amex charges a higher fixed rate. If you want to do small businesses a favor in that manner, you could use either a debit card or a Discover.

[cottoncrown]

Business owners factor in these costs in their prices, they know most people use cards and their prices reflect the credit cost. You aren't hurting them by using the cards but everyone in the end pays higher prices due to credit fees.

[Open123]

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@cottoncrown wrote:
Business owners factor in these costs in their prices, they know most people use cards and their prices reflect the credit cost. You aren't hurting them by using the cards but everyone in the end pays higher prices due to credit fees.

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The only people who end up unfairly paying higer fees are those who use cash or debit.  Those who use high rewards cards will receive a rebate that is transferrend from those using cash.

Either way, as you've pointed out, the pricing is factored in by merchants.  To hope the Durbin amendment will cause Merchants to lower prices is pure folly.  I've never known a merchant who would willing pass any discount to the consumer if they weren't forced to by the free market competition.

[CEOriginal]

I used to work for Intuit's credit card division. The fees don't come directly from Visa/MC/DS/AMEX... They come from the Merchant Services that process the payment. There are HUNDREDS of payment systems and the field is very competitive. Typically, the rate will vary depending upon the amount of the transaction. We had several different tiers, some fixed and some variable. There are also transaction fees per swipe. So, the merchant is charge two fees: a variable (or fixed) rate that is a percentage of the transaction, and an always-fixed fee per swipe.. Usually between .10 and .15. 

For example, a mechanic who usually charges 10 transactions per month at an average of $500 per transaction would benefit from a lower rate but higher transaction fee, and vice versa for a convenience store that has 1,000 transactions per month at an average of $5 per month. 

FYI, this is why some merchants require a minimum amount to use a credit card (though maybe illegal?), because after the transaction fee and rate is charged on a $2 purchase, the merchant is losing money. 

Although, like someone said, big businesses and mom-and-pops alike take these fees into consideration. Part of doing business. 

[john398]

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@CEOriginal wrote:

I used to work for Intuit's credit card division. The fees don't come directly from Visa/MC/DS/AMEX... They come from the Merchant Services that process the payment. There are HUNDREDS of payment systems and the field is very competitive. Typically, the rate will vary depending upon the amount of the transaction. We had several different tiers, some fixed and some variable. There are also transaction fees per swipe. So, the merchant is charge two fees: a variable (or fixed) rate that is a percentage of the transaction, and an always-fixed fee per swipe.. Usually between .10 and .15. 

For example, a mechanic who usually charges 10 transactions per month at an average of $500 per transaction would benefit from a lower rate but higher transaction fee, and vice versa for a convenience store that has 1,000 transactions per month at an average of $5 per month. 

FYI, this is why some merchants require a minimum amount to use a credit card (though maybe illegal?), because after the transaction fee and rate is charged on a $2 purchase, the merchant is losing money. 

Although, like someone said, big businesses and mom-and-pops alike take these fees into consideration. Part of doing business. 

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I thought they recently changes the law and made that legal now...as well as lowered the fees on debit cards