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Keep in mind that that 2.5% gets deducted the final amount paid to the merchant. You may be fine with this, or you may feel a pang of guilt, depending on the me

Keep in mind that that 2.5% gets deducted the final amount paid to the merchant. You may be fine with this, or you may feel a pang of guilt, depending on the merchant. :)

stronglikedan 8y ago
I haven't been a merchant in a while, but I all I remember was a set transaction fee with an additional percentage of the purchase tacked on. The fees were dependent on the type of card, Visa, MC, Amex, & Discover, and had nothing to do with the card issuer. Do they really deduct the issuer's point scheme from the merchant account now? That seems like it would be difficult to manage, what with rolling point schemes and whatnot. Not to mention it would be near impossible for the merchant to keep balanced books if they don't know their costs per purchase until after they've been paid.
- Paperweight 8y ago
  In Canada, rates vary per card and even vary right along with the variable reward schemes. https://www.cfib-fcei.ca/sites/default/files/pdf/5513.pdf https://www.cfib-fcei.ca/sites/default/files/pdf/5513.pdf Merchants aren't allowed to charge different prices for different payment methods, so there's an incentive for credit card issuers to maximise the rewards and quietly pass them along as fees to merchants! It's a huge injustice, IMO. A case was brought to the competition tribunal that would have made issuers notify cardholders that rewards are passed on as fees, but it was rejected. https://www.thebalancesmb.com/small-business-credit-card-2948242 https://www.thebalancesmb.com/small-business-credit-card-294... Some are as high as 3% - so merchants get charged $12 on a $400 transaction, vs. just 12 cents for Interac debit. So you can see why banks are pushing Visa/MC network debit cards now. EDIT: The EU stopped this nonsense by straight up capping interchange fees at 0.3%. Pretty sure Visa/MC are still doing just fine there :) http://europa.eu/rapid/press-release_IP-15-4585_en.htm http://europa.eu/rapid/press-release_IP-15-4585_en.htm
ironjunkie 8y ago
I know those fees exist, but you don't pay "less" if you pay by cash. So it fills my selfish definition of leaving money on the table. It is not a global optimum though.

Keep in mind that that 2.5% gets deducted the final amount paid to the merchant. You may be fine with this, or you may feel a pang of guilt, depending on the merchant. :)

stronglikedan 8y ago

I haven't been a merchant in a while, but I all I remember was a set transaction fee with an additional percentage of the purchase tacked on. The fees were dependent on the type of card, Visa, MC, Amex, & Discover, and had nothing to do with the card issuer. Do they really deduct the issuer's point scheme from the merchant account now? That seems like it would be difficult to manage, what with rolling point schemes and whatnot. Not to mention it would be near impossible for the merchant to keep balanced books if they don't know their costs per purchase until after they've been paid.

Paperweight 8y ago
In Canada, rates vary per card and even vary right along with the variable reward schemes. https://www.cfib-fcei.ca/sites/default/files/pdf/5513.pdf https://www.cfib-fcei.ca/sites/default/files/pdf/5513.pdf Merchants aren't allowed to charge different prices for different payment methods, so there's an incentive for credit card issuers to maximise the rewards and quietly pass them along as fees to merchants! It's a huge injustice, IMO. A case was brought to the competition tribunal that would have made issuers notify cardholders that rewards are passed on as fees, but it was rejected. https://www.thebalancesmb.com/small-business-credit-card-2948242 https://www.thebalancesmb.com/small-business-credit-card-294... Some are as high as 3% - so merchants get charged $12 on a $400 transaction, vs. just 12 cents for Interac debit. So you can see why banks are pushing Visa/MC network debit cards now. EDIT: The EU stopped this nonsense by straight up capping interchange fees at 0.3%. Pretty sure Visa/MC are still doing just fine there :) http://europa.eu/rapid/press-release_IP-15-4585_en.htm http://europa.eu/rapid/press-release_IP-15-4585_en.htm

ironjunkie 8y ago

I know those fees exist, but you don't pay "less" if you pay by cash. So it fills my selfish definition of leaving money on the table. It is not a global optimum though.