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View Diary: How Washington is run, the swipe fee story (74 comments)

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  •  Not really (2+ / 0-)
    Recommended by:
    shrike, greenchiledem

    Those fees are why visa/mc own america. When you see GDP numbers remember.. the cc Companies pretty much take a direct percentage of that. And theres no real "cost" to the banks. It's one of the services you recieve in exchange for loaning the banks your money.

    Think about this. You deposit Your money in the bank. The merchant buys machines that call up the bank and ask the bank if the card is good for your purchase. It costs the banks almost nothing.

    A man is born as many men but dies as a single one.--Martin Heidegger

    by cdreid on Sat Apr 30, 2011 at 05:49:55 PM PDT

    [ Parent ]

    •  oops (2+ / 0-)
      Recommended by:
      antirove, greenchiledem

      CC's work this way to be clear. The merchant pays a percentage to the bank. That cost is passed along to you. IF its an actual credit card you also pay a percentage. And fyi those percentage range not in the 1-2% range they can be up to 10% for some merchants, especially net based.

      A man is born as many men but dies as a single one.--Martin Heidegger

      by cdreid on Sat Apr 30, 2011 at 05:51:55 PM PDT

      [ Parent ]

      •  Where are you getting 10%? (0+ / 0-)

        I've never seen anyone--anywhere--report a number higher than 2% for transaction fees.

        Unless you provide a reliable link to that, I call shenanigans.

        •  I've seen AmEx fees on charge cards as high as (3+ / 0-)
          Recommended by:
          cdreid, greenchiledem, 1864 House

          6%.

          Credit/charge can justify % fees based on the float.

          Debit fees cannot.

          "The way to see by faith is to shut the eye of reason." - Thomas Paine

          by shrike on Sat Apr 30, 2011 at 06:07:27 PM PDT

          [ Parent ]

          •  AmEx... (0+ / 0-)

            ...doesn't issue debit cards, to my knowledge.

            As a credit card, they've long been known to be both expensive (to both consumer, in the form of annual fees and higher APRs, and to merchants) and annoying (in the form of "annual financial reports" they sometimes require of their customers).

            We're really talking about Visa and, to a lesser extent, Mastercard, and every report I've ever seen about their transaction fees hovers between 1-2%.

            •  We're not only talking debit cards (1+ / 0-)
              Recommended by:
              greenchiledem

              We're talking cards in general. And dont let one market segment color your perception. The cc industry is very very sophisticated about its fee tables. Extremely actually.

              A man is born as many men but dies as a single one.--Martin Heidegger

              by cdreid on Sun May 01, 2011 at 01:31:32 AM PDT

              [ Parent ]

        •  I always understood 4% (2+ / 0-)
          Recommended by:
          greenchiledem, Cassandra77

          Have no idea where i got that.  

          To much for small businesses.  We pay cash at a small business.

          If you don't value it, you shouldn't be trusted with it. Rachel Maddow Show on government, April 6. 2011

          by Heart of the Rockies on Sat Apr 30, 2011 at 06:32:43 PM PDT

          [ Parent ]

          •  Visa/MC (1+ / 0-)
            Recommended by:
            antirove

            Used to charge brick and mortar small business 3.5% if i remember right on CC transactions thats probably it. I have no idea of the current setup on brick and mortar small business fees though.

            A man is born as many men but dies as a single one.--Martin Heidegger

            by cdreid on Sun May 01, 2011 at 01:32:35 AM PDT

            [ Parent ]

        •  Youre talking brick and mortar stores (2+ / 0-)
          Recommended by:
          antirove, greenchiledem

          and debit cards only. Call what you will ive dealt with companies that had to deal with high percentages. IT all relates to market sector and chargebacks.

          You can get a merchant account right now within minutes. Do a google search. The fees and percentages you pay depend totally on the factors i mentioned above. A company like walmart  (even online) probably pays 1%. MAybe less. Joebob with his celebrity gossip membership site might pay 5%. "Andreas nude friends" might pay 6. Her buddy "random porn dude" might pay 10 and BARELY keep his account etc etc etc.

          A man is born as many men but dies as a single one.--Martin Heidegger

          by cdreid on Sun May 01, 2011 at 01:30:05 AM PDT

          [ Parent ]

        •  I pay 3.5% plus new addnl fees to AX! (0+ / 0-)

          Or my business does.  
          American Express is the highest charging cc.  Some small businesses don't accept it for that reason.  I think I pay the medium range fees.  If you want to money to get to your bank sooner, then the fee is higher.  Cash flow being the most important financial management aspect of a small business, getting the money in the bank sooner is critically important.

          Fees do go up for many smaller businesses that only have occasional credit/debit card purchases.  I believe I have heard of the 10% is a fee charged to those type of merchants.  Seriously.  

          And on the consumer side, well, I don't have to tell you how the banks have screwed us with debit card fees.  It's highway robbery.  I use cash as much as possible these days.  The bank fees for my own money is outrageous.  

          Dig this.  The most recent fee increase is with my ready reserve.  If rr kicks in, they now charge a $5 fee!  And I still pay the interest on the rr account.  But if I call ahead and transfer the money from rr to my checking account, there is no fee.  Well, like most people, I don't always know in advance when my account is going to need rr funds.  

          And yes, I have a cr union account too, but it's 100 miles away so I have to rely on a local 'big bank' for everyday banking.

          If you are making a decent salary in a non-union company, you owe that to the unions. One thing that corporations do not do is give out money out of the goodness of their hearts.-Molly Ivins

          by greenchiledem on Sun May 01, 2011 at 07:50:59 AM PDT

          [ Parent ]

        •  Amex corporate cards can cost the merchant (0+ / 0-)

          up to 4.75% of the transaction.  Small businesses like mine can't really pass that cost on to you and stay competitive.  We absorb the costs.  This is why some
          businesses won't accept Amex.

          MC/Visa is usually about 2.75 all in with per swipe fees and other bullshit charges.
          Cards that offer rewards cost the merchant more in fees.
          A corp. Visa reward card might be as much as 3.75%.
          Debit cards are a smaller percentage, but only if you key in your pin number.  Otherwise they are processed like a regular credit card and subject to the regular rates.  
          I'm a florist, and just about all of my transactions are
          call ins.  They are subject to the higher rates.
          Credit card companies rake in the dough collecting fees from the processing companies who are collecting fees from merchants and charging high interest rates to their customers.
          In plain language they are blood sucking vampires.

          United we stand - Divided we are all truly screwed. Keep them blaming one another - they'll never notice what's really going on.

          by Cassandra77 on Sun May 01, 2011 at 08:44:54 AM PDT

          [ Parent ]

    •  Well, actually, there are costs to the bank. (3+ / 0-)
      Recommended by:
      Heart of the Rockies, WillR, BigOkie

      Computers (particularly institutional-sized computers) cost money to maintain, as do computer networks.  Network access alone is going to cost a hefty amount, as will the traffic on the network.

      Just because wifi is free at Starbucks doesn't mean there's no cost to data transfer.

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