5 ms·

Actually - it's mostly because of cost / benefit shifting. A card can attract USERS by increasing the rewards it offers -> and charging MERCHANTS for the rewar

Actually - it's mostly because of cost / benefit shifting. A card can attract USERS by increasing the rewards it offers -> and charging MERCHANTS for the reward. So visa infinite cards might charge a much higher swipe fee to a merchant, and then make available cash back + first party car insurance + lots of bennies to the holders of these "elite" cards. They justify this to merchants by claiming that these "elite" users spend big bucks. The reality - if users of cards were charged the actual swipe fee their card incurred -> they would push for SUPER low fees or switch to debit cards. Many lucrative business depend on the person picking the service not being the one paying for it or the kickback going to someone other than one paying.

scarface74 7y ago
Many lucrative business depend on the person picking the service not being the one paying for it So in this case it’s better for the user but worse for the person paying. Just the opposite of enterprise software sells.
- tyingq 7y ago
  Merchants also bear all the costs for fraudulent purchases. Even if they followed as much procedure as the CC company provides.
HeyImAlex 7y ago
Pretty evil! I imagine the card companies have an explicit rule that, in order to accept their cards, a merchant can't charge their users any extra fee? I wonder if some regulation were created that bans rules like that from existence whether this would change tomorrow. Kroger stopped supporting Visa cards for a minute and I realized that's literally all I carry.
- ubercow13 7y ago
  The opposite law already exists in the EU - merchants aren't allowed to charge users extra for card purchases
  - disiplus 7y ago
    the intent was to dissalow discrimination cash vs card. i know eu likes that electric payments, it a lot easier to track. but what with the fees from card a vs card b.
- londons_explore 7y ago
  The EU sets limits on card interchange fees. Suddenly all "reward cards" lost most of their rewards...
  - ceejayoz 7y ago
    Good. They’re a regressive wealth transfer from the poor to the well off.
- loeg 7y ago
  > I imagine the card companies have an explicit rule that, in order to accept their cards, a merchant can't charge their users any extra fee? In the US, this was the subject of a recent class-action suit! https://www.paymentcardsettlement.com/en https://www.paymentcardsettlement.com/en
officeplant 7y ago
Meanwhile it's become the new hot thing locally (Southern USA) to charge credit and debit card users a "convenience fee" sometimes as high as 35 cents a transaction. Everyone went from offering discounts to cash users to simply charging card users more.
- crazygringo 7y ago
  Interestingly, in 2013 both credit card minimums (up to a maximum of $10) and surcharges (up to a maximum of 4%) became legally federally, although there are 10 states that still prohibit surcharges (including New York, California, and Texas). So seems like $0.35 is allowable on any transaction of $8.75 or more. [1] https://www.thebalance.com/credit-card-surcharges-315423 https://www.thebalance.com/credit-card-surcharges-315423
  - velosol 7y ago
    I think it's also worth noting that many of those states allow cash discounts. https://www.ncsl.org/research/financial-services-and-commerce/credit-or-debit-card-surcharges-statutes.aspx https://www.ncsl.org/research/financial-services-and-commerc...
- knubie 7y ago
  I've started seeing this trend in a lot of small shops here in NYC as well. There used to be a ton of "cash only" places, but now I'm seeing more places that I would expect to be cash only accepting credit cards with a "convenience fee."
- conradfr 7y ago
  I thought it was illegal but I may have been wrong.
- lotsofpulp 7y ago
  What is the difference between a "discount for cash payers" and "convenience fee for card users", when the only two options are cash and card? In both scenarios, price for purchasing with cash is less than price for purchasing with card. Seems like semantics to me.

scarface74 7y ago

Many lucrative business depend on the person picking the service not being the one paying for it So in this case it’s better for the user but worse for the person paying. Just the opposite of enterprise software sells.

tyingq 7y ago
Merchants also bear all the costs for fraudulent purchases. Even if they followed as much procedure as the CC company provides.

HeyImAlex 7y ago

Pretty evil! I imagine the card companies have an explicit rule that, in order to accept their cards, a merchant can't charge their users any extra fee? I wonder if some regulation were created that bans rules like that from existence whether this would change tomorrow. Kroger stopped supporting Visa cards for a minute and I realized that's literally all I carry.

ubercow13 7y ago
The opposite law already exists in the EU - merchants aren't allowed to charge users extra for card purchases
- disiplus 7y ago
  the intent was to dissalow discrimination cash vs card. i know eu likes that electric payments, it a lot easier to track. but what with the fees from card a vs card b.
londons_explore 7y ago
The EU sets limits on card interchange fees. Suddenly all "reward cards" lost most of their rewards...
- ceejayoz 7y ago
  Good. They’re a regressive wealth transfer from the poor to the well off.
loeg 7y ago
> I imagine the card companies have an explicit rule that, in order to accept their cards, a merchant can't charge their users any extra fee? In the US, this was the subject of a recent class-action suit! https://www.paymentcardsettlement.com/en https://www.paymentcardsettlement.com/en

officeplant 7y ago

Meanwhile it's become the new hot thing locally (Southern USA) to charge credit and debit card users a "convenience fee" sometimes as high as 35 cents a transaction. Everyone went from offering discounts to cash users to simply charging card users more.

crazygringo 7y ago
Interestingly, in 2013 both credit card minimums (up to a maximum of $10) and surcharges (up to a maximum of 4%) became legally federally, although there are 10 states that still prohibit surcharges (including New York, California, and Texas). So seems like $0.35 is allowable on any transaction of $8.75 or more. [1] https://www.thebalance.com/credit-card-surcharges-315423 https://www.thebalance.com/credit-card-surcharges-315423
- velosol 7y ago
  I think it's also worth noting that many of those states allow cash discounts. https://www.ncsl.org/research/financial-services-and-commerce/credit-or-debit-card-surcharges-statutes.aspx https://www.ncsl.org/research/financial-services-and-commerc...
knubie 7y ago
I've started seeing this trend in a lot of small shops here in NYC as well. There used to be a ton of "cash only" places, but now I'm seeing more places that I would expect to be cash only accepting credit cards with a "convenience fee."
conradfr 7y ago
I thought it was illegal but I may have been wrong.
lotsofpulp 7y ago
What is the difference between a "discount for cash payers" and "convenience fee for card users", when the only two options are cash and card? In both scenarios, price for purchasing with cash is less than price for purchasing with card. Seems like semantics to me.