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The credit card companies pass on these perks to the merchants. Transaction fees for card purchases are actually higher for cards with rewards.
by cullenking 16y ago
The credit card companies pass on these perks to the merchants. Transaction fees for card purchases are actually higher for cards with rewards.
- aquark 16y agoI hadn't realized this before. How is this type of thing structured in the merchant's agreement with the card processor? Could they in theory issue a 100% cash back card that the merchant gets charged 100% on? How is the merchant supposed to know what they are getting charged when the swipe a given piece of plastic?
- cullenking 16y agoThe fees depend on what merchant provider a company is going through. Braintree is what I use, and they charge a flat, albeit higher, percentage for all swipes, rather than have a huge list of the percentages. Here is an example of their breakdown of Costco's fee structure (yeah, you can get a costco merchant services account). http://www.braintreepaymentsolutions.com/blog/Costco-your-marketing-department-has-gone-rogue http://www.braintreepaymentsolutions.com/blog/Costco-your-ma... I have no idea if what you proposed is possible, but my guess is that no one would accept that card :) I don't accept amex because I think it represents a fraction of actual users, and those users have other cards because they are used to getting told "nope, sorry don't accept amex".