Breakdown of card processing fees - article from The Economist

[Hansolojr]

"The old bank/card model is still entrenched in the rich world"

In case of paywall, here is the interesting part:

"..for an $100 transaction, about $0.14 goes to the card network, $0.43 goes to the acquirer and $1.68 goes to the issuing bank.  Consumers get about $1.30 back through rewards..." (so the issuing bank nets $1.68-1.30=0.38)

[FireMedic1]

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@Hansolojr wrote:

"The old bank/card model is still entrenched in the rich world"

In case of paywall, here is the interesting part:

"..for an $100 transaction, about $0.14 goes to the card network, $0.43 goes to the acquirer and $1.68 goes to the issuing bank.  Consumers get about $1.30 back through rewards..." (so the issuing bank nets $1.68-1.30=0.38)

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Cant read the article behind a paywall. Yes we get a certain percent. But oh yes the banks gets there cut too. Swipes make them money.

[Anonymalous]

I found these quotes more interesting:

• "A study by the Reserve Bank of Australia found that average card fees in Australia were 1.15% for the smallest tenth of retailers but only 0.47% for the largest tenth."
• "Credit-card usage increases spending by around 12-18%".
• "Those earning $25,000-50,000 paid a 1.4% net cost after taking into account rewards. Those earning over $150,000 faced only a 0.82% net cost."

In other words, Amazon gets a better deal than mom & pop retailers, credit cards lure people into spending more, and credit card rewards are effectively yet another wealth transfer from the poor to the rich. The article also discusses instant transfers via FedNow as a solution, but that's like like letting loose a man-eating tiger in your house to catch a mouse.

[M_Smart007]

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@Hansolojr wrote:

"The old bank/card model is still entrenched in the rich world"

In case of paywall, here is the interesting part:

"..for an $100 transaction, about $0.14 goes to the card network, $0.43 goes to the acquirer and $1.68 goes to the issuing bank.  Consumers get about $1.30 back through rewards..." (so the issuing bank nets $1.68-1.30=0.38)

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Credit Card Processing Fees (2023 Guide)

https://www.forbes.com/advisor/business/credit-card-processing-fees/