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They do, but different cards on different networks have vastly different fees. The consumer using Visa SuperRewardsPlatinum probably doesn't know that it's cos

They do, but different cards on different networks have vastly different fees. The consumer using Visa SuperRewardsPlatinum probably doesn't know that it's costing the retailer more than other cards when they use it. The originating bank does though, which is exactly why they chose that network in the first place. The market is opaque and doesn't lead towards lower fees and greater efficiency. It reminds me of super-expensive "we'll pay your insurance deductible" auto glass places which used to advertise on TV all the time. Inflate the cost, and give the consumer a kickback.

mehrdadn 8y ago
> The consumer using Visa SuperRewardsPlatinum probably doesn't know that it's costing the retailer more than other cards when they use it. You mean the merchant pays a higher fee when you use one Visa card vs. another Visa card? Or you mean compared to Mastercard etc.?
- oasisbob 8y ago
  Correct. The fee will vary within a network based on all sorts of things. There are low-rate carve outs for low-margin products (eg gasoline), discounts for "card-in-hand" transactions, and higher fees for premium cards. https://www.helcim.com/us/visa-interchange-rates/ https://www.helcim.com/us/visa-interchange-rates/ https://usa.visa.com/dam/VCOM/global/support-legal/documents/visa-usa-interchange-reimbursement-fees-april-2018.pdf https://usa.visa.com/dam/VCOM/global/support-legal/documents...
  - mehrdadn 8y ago
    Ohh.. so it's saying Visa CPS Retail vs. Visa Rewards Traditional vs. Visa Rewards Signature vs. etc. are different. Interesting, thanks, I didn't know that. But if I'm buying two of the same product (obviously -- I'm not talking about two gas vs. groceries here) with two different cards, both of which are from the same network and the same "kind" (by which I mean the categorizations listed above, like two that are both "Visa Rewards Signature"), then the merchant will pay the same fee, right? i.e. it's not like the mere fact that one pays 1% cash back and one pays 2% cash back could possibly result in a different charge to the merchant by itself if they're both (say) lumped together as Rewards Traditional?
    - aeternus 8y ago
      Not always, even the exact same card can run on different networks. For example: 1) You buy a product with your Visa debit card and enter your pin 2) You buy the same product, same card, but don't enter your pin 3) You buy the same product, same card, but your card won't swipe so the cashier manually enters your card number Each of these scenarios will likely result in different fees to the merchant.
      - mehrdadn 8y ago
        This is avoiding and completely missing the point of my question. I was not asking whether card fees can vary based on how the card is processed. I was asking to precisely what extent they can vary based on the card itself. Please re-read my entire question above.
        adrr 8y ago
        Variable interchange fees range from 0.05% for Visa Debit Cards(Big Banks) to 2.4% for VISA Infinite for most merchant categories. Fees vary by card type and also merchant type.
        mehrdadn 8y ago
        This is frustrating. Again, you guys are avoiding the question. I don't understand why you guys are doing this. Not only does it waste your own time and mine to be answering a different question than the one asked, you're also repeating a point others have gotten across already [1] [2]. Could you please, please actually read the question? I had very clearly and specifically asked about the same kind of card (which, lest you found the word "kind" unclear, I explicitly gave an example of: assume both cards are "Visa Rewards Signature"), for the same product, with the same merchant, processed in the same manner, etc. The only difference I am focusing on is the card perks (which, again, I gave an example of lest it was unclear: 1% vs. 2% cash back... or 5x points vs. 3% cash back, or whatever you can imagine) or perhaps the issuer (Citi vs. Chase vs. whatever). Somehow you guys are ignoring everything I've asked and repeating to me how merchant fees are different based on the card type (debit vs. credit), card kind (signature vs. regular), merchant (big vs. small), product (groceries vs. gas), etc... yes, thank you, I understood that part already [2], and I was very, very explicitly not asking about those: > if I'm buying two of the same product (obviously -- I'm not talking about two gas vs. groceries here) with two different cards, both of which are from the same network and the same "kind" (by which I mean the categorizations listed above, like two that are both "Visa Rewards Signature"), then the merchant will pay the same fee, right? i.e. it's not like the mere fact that one pays 1% cash back and one pays 2% cash back could possibly result in a different charge to the merchant by itself if they're both (say) lumped together as Rewards Traditional? [1] https://news.ycombinator.com/item?id=17658575 https://news.ycombinator.com/item?id=17658575 [2] https://news.ycombinator.com/item?id=17658479 https://news.ycombinator.com/item?id=17658479
- deelowe 8y ago
  I seriously doubt the retailer pays different fees depending on th card. That sounds bizarre.
  - inferiorhuman 8y ago
    The merchant absolutely pays different fees depending on the card. A Visa platinum card will cost more for the merchant than a basic, non-rewards card. Regardless of scale, different types of merchants also pay different fees.
    - deleted 8y ago
      [deleted]
  - oasisbob 8y ago
    It's going to depend on how the retailer's contract with their merchant account works. Your mom and pop store may just pay a higher rate, and a high txn fee and call it a day. Simple contract. For a large retailer like Kroger, there's no way in hell they're leaving all the interchange discounts on the table.
  - function_seven 8y ago
    They do. https://www.helcim.com/us/visa-interchange-rates/ https://www.helcim.com/us/visa-interchange-rates/
    - timr 8y ago
      Those are the rates paid by the processor to the bank. They're not the rates paid by the business to the processor. Per VISA's website: "Merchants do not pay interchange reimbursement fees—merchants negotiate and pay a “merchant discount” to their financial institution that is typically calculated as a percentage per transaction." https://usa.visa.com/support/small-business/regulations-fees.html https://usa.visa.com/support/small-business/regulations-fees... It seems logical that VISA doesn't want merchants to be able to determine per-card costs, since this keeps merchants from trying to optimize their fees.
- ericpauley 8y ago
  Yes! Visa/Signature/Infinite have different fee schedules, by a large margin. I was once at a smaller restaurant and they didn't want to take my Amex for fear of fees, little did they know my Visa Infinite had an even higher swipe fee.
  - mehrdadn 8y ago
    Are you sure it was "fear of fees" rather than "not having a contract with AmEx"? I would assume Visa's agreements wouldn't let them just refuse your Infinite, since it would defeat the point of the card if they could just refuse the high-fee ones. (Just a guess; I don't know how it works.)
    - adrr 8y ago
      Merchants do discriminate against card types. Some merchants will take Visa debit and not any other visa cards. Some will charge extra like Venmo and Verizon if you use anything but a Visa Debit. Some subscription merchants won't let you use non-reloadable prepaid card especially if they offer a low amount trial and its also against the merchant agreement to charge a non-reloadable prepaid card with the recurring flag which subscription merchants set to get better success rate on auths.
      - mehrdadn 8y ago
        Debit cards and credit cards are obviously different beasts though. You might as well be comparing cash against credit cards. Nobody expects them to be treated equally. The question was, can/do merchants discriminate against different types of credit cards from the same network (such as regular vs. Signature Rewards)?
        adrr 8y ago
        There is debit, prepaid, prepaid non-reloadable, business credit, business debit, government/purchasing, payroll, credit cards(gold, signature,infinite) in the US. Add international and there's a lot more like Electron(travel debit). It even gets more complicated because debit can be broken down to durbin and non durbin. You can actually get debit cards that give you rewards that charge at credit card level interchange rates. If you're talking credit cards, I don't know anyone that discriminates against the different types but it is very possible because you can get that info from the PAN.

mehrdadn 8y ago

> The consumer using Visa SuperRewardsPlatinum probably doesn't know that it's costing the retailer more than other cards when they use it. You mean the merchant pays a higher fee when you use one Visa card vs. another Visa card? Or you mean compared to Mastercard etc.?

oasisbob 8y ago
Correct. The fee will vary within a network based on all sorts of things. There are low-rate carve outs for low-margin products (eg gasoline), discounts for "card-in-hand" transactions, and higher fees for premium cards. https://www.helcim.com/us/visa-interchange-rates/ https://www.helcim.com/us/visa-interchange-rates/ https://usa.visa.com/dam/VCOM/global/support-legal/documents/visa-usa-interchange-reimbursement-fees-april-2018.pdf https://usa.visa.com/dam/VCOM/global/support-legal/documents...
- mehrdadn 8y ago
  Ohh.. so it's saying Visa CPS Retail vs. Visa Rewards Traditional vs. Visa Rewards Signature vs. etc. are different. Interesting, thanks, I didn't know that. But if I'm buying two of the same product (obviously -- I'm not talking about two gas vs. groceries here) with two different cards, both of which are from the same network and the same "kind" (by which I mean the categorizations listed above, like two that are both "Visa Rewards Signature"), then the merchant will pay the same fee, right? i.e. it's not like the mere fact that one pays 1% cash back and one pays 2% cash back could possibly result in a different charge to the merchant by itself if they're both (say) lumped together as Rewards Traditional?
  - aeternus 8y ago
    Not always, even the exact same card can run on different networks. For example: 1) You buy a product with your Visa debit card and enter your pin 2) You buy the same product, same card, but don't enter your pin 3) You buy the same product, same card, but your card won't swipe so the cashier manually enters your card number Each of these scenarios will likely result in different fees to the merchant.
    - mehrdadn 8y ago
      This is avoiding and completely missing the point of my question. I was not asking whether card fees can vary based on how the card is processed. I was asking to precisely what extent they can vary based on the card itself. Please re-read my entire question above.
      - adrr 8y ago
        Variable interchange fees range from 0.05% for Visa Debit Cards(Big Banks) to 2.4% for VISA Infinite for most merchant categories. Fees vary by card type and also merchant type.
        mehrdadn 8y ago
        This is frustrating. Again, you guys are avoiding the question. I don't understand why you guys are doing this. Not only does it waste your own time and mine to be answering a different question than the one asked, you're also repeating a point others have gotten across already [1] [2]. Could you please, please actually read the question? I had very clearly and specifically asked about the same kind of card (which, lest you found the word "kind" unclear, I explicitly gave an example of: assume both cards are "Visa Rewards Signature"), for the same product, with the same merchant, processed in the same manner, etc. The only difference I am focusing on is the card perks (which, again, I gave an example of lest it was unclear: 1% vs. 2% cash back... or 5x points vs. 3% cash back, or whatever you can imagine) or perhaps the issuer (Citi vs. Chase vs. whatever). Somehow you guys are ignoring everything I've asked and repeating to me how merchant fees are different based on the card type (debit vs. credit), card kind (signature vs. regular), merchant (big vs. small), product (groceries vs. gas), etc... yes, thank you, I understood that part already [2], and I was very, very explicitly not asking about those: > if I'm buying two of the same product (obviously -- I'm not talking about two gas vs. groceries here) with two different cards, both of which are from the same network and the same "kind" (by which I mean the categorizations listed above, like two that are both "Visa Rewards Signature"), then the merchant will pay the same fee, right? i.e. it's not like the mere fact that one pays 1% cash back and one pays 2% cash back could possibly result in a different charge to the merchant by itself if they're both (say) lumped together as Rewards Traditional? [1] https://news.ycombinator.com/item?id=17658575 https://news.ycombinator.com/item?id=17658575 [2] https://news.ycombinator.com/item?id=17658479 https://news.ycombinator.com/item?id=17658479
deelowe 8y ago
I seriously doubt the retailer pays different fees depending on th card. That sounds bizarre.
- inferiorhuman 8y ago
  The merchant absolutely pays different fees depending on the card. A Visa platinum card will cost more for the merchant than a basic, non-rewards card. Regardless of scale, different types of merchants also pay different fees.
  - deleted 8y ago
    [deleted]
- oasisbob 8y ago
  It's going to depend on how the retailer's contract with their merchant account works. Your mom and pop store may just pay a higher rate, and a high txn fee and call it a day. Simple contract. For a large retailer like Kroger, there's no way in hell they're leaving all the interchange discounts on the table.
- function_seven 8y ago
  They do. https://www.helcim.com/us/visa-interchange-rates/ https://www.helcim.com/us/visa-interchange-rates/
  - timr 8y ago
    Those are the rates paid by the processor to the bank. They're not the rates paid by the business to the processor. Per VISA's website: "Merchants do not pay interchange reimbursement fees—merchants negotiate and pay a “merchant discount” to their financial institution that is typically calculated as a percentage per transaction." https://usa.visa.com/support/small-business/regulations-fees.html https://usa.visa.com/support/small-business/regulations-fees... It seems logical that VISA doesn't want merchants to be able to determine per-card costs, since this keeps merchants from trying to optimize their fees.
ericpauley 8y ago
Yes! Visa/Signature/Infinite have different fee schedules, by a large margin. I was once at a smaller restaurant and they didn't want to take my Amex for fear of fees, little did they know my Visa Infinite had an even higher swipe fee.
- mehrdadn 8y ago
  Are you sure it was "fear of fees" rather than "not having a contract with AmEx"? I would assume Visa's agreements wouldn't let them just refuse your Infinite, since it would defeat the point of the card if they could just refuse the high-fee ones. (Just a guess; I don't know how it works.)
  - adrr 8y ago
    Merchants do discriminate against card types. Some merchants will take Visa debit and not any other visa cards. Some will charge extra like Venmo and Verizon if you use anything but a Visa Debit. Some subscription merchants won't let you use non-reloadable prepaid card especially if they offer a low amount trial and its also against the merchant agreement to charge a non-reloadable prepaid card with the recurring flag which subscription merchants set to get better success rate on auths.
    - mehrdadn 8y ago
      Debit cards and credit cards are obviously different beasts though. You might as well be comparing cash against credit cards. Nobody expects them to be treated equally. The question was, can/do merchants discriminate against different types of credit cards from the same network (such as regular vs. Signature Rewards)?
      - adrr 8y ago
        There is debit, prepaid, prepaid non-reloadable, business credit, business debit, government/purchasing, payroll, credit cards(gold, signature,infinite) in the US. Add international and there's a lot more like Electron(travel debit). It even gets more complicated because debit can be broken down to durbin and non durbin. You can actually get debit cards that give you rewards that charge at credit card level interchange rates. If you're talking credit cards, I don't know anyone that discriminates against the different types but it is very possible because you can get that info from the PAN.