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"The 2% cashback has to come from somewhere." Yes, but in reality, the program comes from an upside down approach to overcoming the obviously anti-competitive
by jariel 6y ago
"The 2% cashback has to come from somewhere."
Yes, but in reality, the program comes from an upside down approach to overcoming the obviously anti-competitive practices that VISA/MC use to forbid retailers from offering discounts for not using VISA etc..
You can't say "Get 2% if you use cash instead of VISA". (Notice that nobody ever advertises that?) Because VISA doesn't allow it.
You also can't say "$1.99 + 20 cents processing charge" - no, the price must be listed including charges. (Notice that nobody every does this?)
But you can possibly find ways to give points, or 'cash-back'.
Until now ... [1]
VISA is now saying that even such 'cash back' rewards programs are a violation of its rules.
Have a look at the press release - it's positively Orwellian:
"In order to maintain a level playing field" -> "In order to avoid all transparency and maintain our hidden monopoly" we require that nobody can take steps which highlight the how our transaction fees are embedded in the price.
These are pretty blatant anti-competitive practices and taking them on is tantamount to taking on the entire banking system. It's not going to happen.
There would need to be an 'outside disruptor' like the Word Processor to the Typewriter kind of thing.
[1] https://www.pymnts.com/visa/2018/non-compliant-cash-discount-card-fees/ https://www.pymnts.com/visa/2018/non-compliant-cash-discount...
- wolco 6y agoLike some kind of virtual coin.
- zaxu 6y agoThe ability to purely make transactions is trivial - you can just use a debit card. The value of credit cards comes from other factors like fraud protection, SCI compliance, actual credit, etc.
- eru 6y agoDebit cards also charge some fees, but typically lower. The fraud protection of credit cards mostly comes out of the pockets of the merchant, I think? So the merchant could give people a discount for using means of payment without a chargeback, like cash. You are right about the actual credit. Though eg in Germany people usually use their overdraft in a same way that American seem to be using their credit cards for short term credit. (For either convenience is the main selling point. The fees and interest rates for overdraft and credit card debt are usually quite high, I think?)
- acomjean 6y ago>Get 2% if you use cash instead of VISA" Some gas stations where I live have a "credit" price and a lower "cash" price.
- protomyth 6y agoI've also seen a number of gas stations in ND that have a $10 minimum for cards. This also carried over to some grocery stores.
- conductr 6y agoSmall dollar transactions really need a better solution. Idk swipe rates, but something like 2.9% + $0.30 being a total transaction cost of 5.9% is just insane. Especially if you’re business is majority small transactions such as could be the case in a bodega or gas station.
- monadic2 6y agoYes that was a very odd thing about moving to SF: people using credit cards on <$5 transactions and merchants actually allowing it.
- tomklein 6y agoIn Germany lots of places just don’t accept any cards besides Visa and MasterCard just because of the seller fees.
- cynix 6y ago> You can't say "Get 2% if you use cash instead of VISA". (Notice that nobody ever advertises that?) Because VISA doesn't allow it. > You also can't say "$1.99 + 20 cents processing charge" - no, the price must be listed including charges. (Notice that nobody every does this?) We see these a lot in Australia. I wish they'd enforce the same pricing here for cash and card — I don't like to carry cash around, and I hate it that I have to pay a surcharge when paying by card.
- shkkmo 6y ago> I don't like to carry cash around, and I hate it that I have to pay a surcharge when paying by card. So you think your use of a credit card should be subsidized by people who pay in cash?
- Rebelgecko 6y agoI wonder how much more expensive credit cards actually are? Cash costs money/time to handle and deposit, it's easily stolen, and easy to commit fraud with (like the classic move where a drive thru employee pockets the cash from a sale without ringing it up)
- toast0 6y agoThe computerization of order taking and kitchen tickets would seem to make it harder to charge a customer without ringing it up? I know you could cancel it in the system, but that's gotta be counted somewhere where a manager is going to see it eventually?
- eru 6y agoDepends on how much you can trust your employees.
- paranoidrobot 6y agoOne issue I know smaller retailers sometimes have is that it can take a long time to get cleared funds into their account. One small cafe near a place I used to work said it usually took 30-60 days for funds to clear into their account after a card transaction. That, for them, was a major problem as it meant that they couldn't then pay their suppliers in a timely manner when cashflow was highly variable. Then again, a bakery I visited that was in a small town said they'd stopped taking cash, as they got robbed some huge number of times.
- arrty88 6y agoYou’re correct in 99% of cases. Somehow gas stations can advertise different prices for cash.
- jedberg 6y agoSince Jan. 27, 2013, all retailers have been allowed to charge a fee for using credit. However, there are a lot of rules which are hard for regular retailers to follow, but easy for gas stations to follow, which is why you mostly only see it at gas stations.
- badwolf 6y agoThe vending machine in my Apartment bldg has a sticker saying that credit card price is $0.10 more than the stated price and to use cash/coin to get the stated price. The machine does not accept bills or coins.
- jariel 6y agoI should add because I cannot edit my comment that some of these parameters have changed in the last few years, however, it various by jurisdiction. Also, the universal incumbency established by these players was deeply entrenched before such programs were relinquished.
- deleted 6y ago[deleted]
- fragmede 6y agoThe outside disrupter was supposed to be Apple Pay, but that didn't work and now Apple just issues credit cards (through Goldman Sachs). Visa/MC has such a monopoly stranglehold that getting kicked off their Network is tantamount to going broke. There are esoteric options aka Bitcoin, money order, check, but if being able to accept credit cards makes this drastically more difficult. (Ask the legal cannabis industry how it's going.) More modern attempts at disruption - Zelle/PayPal/Venmo are totally at the mercy of the banks. Who are quite happy with the status quo.
- adrr 6y agoApple Pay charges a fee as well. It also isn’t a payment system but a tokenization system similar to the chip on credit cards. Zelle was created by the big bank which is why you don’t see it at the small local banks. None of the competitor banks(fintech) have zelle support and I guess this isn’t their choice. They have to move money by ach with is much slower. Any payment/money movement system needs a license and you’re still bound by federal rules on AML and KYC. It makes it hard to support the cannabis industry. AML laws will force you to report large cash movements.
- kalleboo 6y agoThey may be referring to Apple Pay Cash, which is an iMessage-based venmo style service where you cash out via ACH or pay in stores using your Cash balance.
- conductr 6y agoSmall banks can integrate zelle, it’s their choice they’re not being locked out
- adrr 6y ago0.75 per transaction locks out the small banks. It would be the most expensive way to transfer money.
- 6y ago
- reaperducer 6y agoYou can't say "Get 2% if you use cash instead of VISA". (Notice that nobody ever advertises that?) Because VISA doesn't allow it. I see this all the time. * At more than one bookstore, the dry cleaner, markets, my current and previous landlord, my accountant, and pretty much every gas station since the 1990's. * Pre-quarantine. Now I don't see anything.
- deleted 6y ago[deleted]
- JAlexoid 6y agoThere are cases, where the person you're interacting with isn't likely to be audited or doesn't have a direct contract with the payment processor. Gas stations I find weird, in general. How did they get that exception?
- rblatz 6y agoIt’s really only one chain I see doing that, and I’ve never bought gas from them and never will. The first time I lied in and they told me they were charging more for card I left.
- zorked 6y agoThey should have told you that they were charging less for cash.
- bluedino 6y agoLots of gas stations have the 'cash' price listed on the sign
- Thorrez 6y ago> You also can't say "$1.99 + 20 cents processing charge" - no, the price must be listed including charges. (Notice that nobody every does this?) The place I went to yesterday for lunch did this. This is in Silicon Valley. I believe it was a 3.9% credit card fee.
- petre 6y agoYou never see that in Europe. What you see is shop owners claiming their POS is broken.
- disillusioned 6y agoThis used to be the case, but it isn't anymore. https://en.wikipedia.org/wiki/Expressions_Hair_Design_v._Schneiderman https://en.wikipedia.org/wiki/Expressions_Hair_Design_v._Sch... Plus, plenty of gas stations show a cash/credit price on their signs. The merchants are no longer allowed to block this behavior.
- JAlexoid 6y agoThat's applicable to legislation, private contracts can still require no surcharge.
- arcticbull 6y agoYou were always allowed to offer cash discounts. What you weren't allowed to do was impose credit card surcharges. That was recently eliminated.
- deleted 6y ago[deleted]
- eloisant 6y agoInterestingly, in Japan most electronic shops (like Bic Camera or Yodobashi Camera) have a point card where you get 5% not directly as cash back but as "points" that you can use any time for a further purchase. But that's only if you pay by cash, you don't get any point by paying by card.
- ulzeraj 6y agoYodobashi offers a 5% discount if you pay with visa card. Combine that with the 8% tax free deduction if you hold a temporary tourist visa.
- monadic2 6y agoI find it pretty nuts that the person who chooses the payment method doesn’t pay the charge. I always try to pay with cash if I can help it.