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A clue to what the companies are thinking from the article: "Its payments are also routed from the retailer to the ACH system instead of the credit card system

by untog 11y ago

A clue to what the companies are thinking from the article: "Its payments are also routed from the retailer to the ACH system instead of the credit card system, which saves retailers from having to pay interchange fees (typically around 2% of the transaction amount)"

jimkri 11y ago
Yea I realized that when I was thinking about it. Which is a financial smart reason, but in the end it limits them. If I only have my phone which I have android pay on and I need to get something from a drug store, I would go to CVS but they don't accept NFC. So I will have to go to Walgreen's instead which is usually near a CVS. So I don't get why they don't offer NFC, because keeping 98% of the transaction amount is better than 0.
- untog 11y ago
  Because what you're saying won't happen in a lot of situations. Drugs stores are interchangeable, but Target and Walmart are much less so, particularly out of urban centres.
  - jimkri 11y ago
    Yea that is true, I totally forgot about towns where Walmart is the only store.
- ISL 11y ago
  If your margin is only a few percent, 2% is a big deal. What matters to a retailer isn't the revenue, it's the difference between costs and revenue.
  - toomuchtodo 11y ago
    Walmart is also smart about this. They algorithmically determine how many cashiers to have at certain times of the day, under the assumption that even though some people may give up and leave instead of waiting in line, its still more profitable for that to occur than to staff more cashiers for everyone to complete their purchases in a timely manner. In the real world, its about profits, not volume.
  - jimkri 11y ago
    Good point, with Walmart they will generate revenue no matter what, but to cut cost it makes sense to use it.
ska 11y ago
Isn't this the entire point of the exercise? It certainly doesn't seem to be about consumers.
TheCoelacanth 11y ago
They also get to offload the burden of paying for fraudulent transactions onto the user.

by untog 11y ago

jimkri 11y ago

Yea I realized that when I was thinking about it. Which is a financial smart reason, but in the end it limits them. If I only have my phone which I have android pay on and I need to get something from a drug store, I would go to CVS but they don't accept NFC. So I will have to go to Walgreen's instead which is usually near a CVS. So I don't get why they don't offer NFC, because keeping 98% of the transaction amount is better than 0.

untog 11y ago
Because what you're saying won't happen in a lot of situations. Drugs stores are interchangeable, but Target and Walmart are much less so, particularly out of urban centres.
- jimkri 11y ago
  Yea that is true, I totally forgot about towns where Walmart is the only store.
ISL 11y ago
If your margin is only a few percent, 2% is a big deal. What matters to a retailer isn't the revenue, it's the difference between costs and revenue.
- toomuchtodo 11y ago
  Walmart is also smart about this. They algorithmically determine how many cashiers to have at certain times of the day, under the assumption that even though some people may give up and leave instead of waiting in line, its still more profitable for that to occur than to staff more cashiers for everyone to complete their purchases in a timely manner. In the real world, its about profits, not volume.
- jimkri 11y ago
  Good point, with Walmart they will generate revenue no matter what, but to cut cost it makes sense to use it.

ska 11y ago

Isn't this the entire point of the exercise? It certainly doesn't seem to be about consumers.

TheCoelacanth 11y ago

They also get to offload the burden of paying for fraudulent transactions onto the user.