5 ms·

Don't other countries limit the amount payment providers can charge?

kerkeslager 6y ago
Yes. The US, however, does not. Additionally, the terms of use of credit card companies forbids charging a different price for cash versus card. This means that businesses which aren't large enough to negotiate different terms, have to raise prices across the board to cover the cost of credit card payments--even using cash, you're paying rent to the credit card companies.
- ianhorn 6y ago
  Maybe the simplest law to make it less of a shit deal for society is forbid the forbidding of charging different prices for cash vs card. Or something halfway, like forcing card companies to allow price differences up to x% of their charge.
  - kerkeslager 6y ago
    > Maybe the simplest law to make it less of a shit deal for society is forbid the forbidding of charging different prices for cash vs card. Agreed. > Or something halfway, like forcing card companies to allow price differences up to x% of their charge. If I want to use cash, why should I subsidize any portion of the credit card company? I don't see the logic of a half-measure. I firmly believe that corporations (and other collectives) do not have rights, individuals have rights. This is a prime example where refusal to regulate corporations harms individuals.
- dhosek 6y ago
  If you're paying cash you're not paying anything to the credit card companies. What you are doing is subsidizing my rewards cash back by giving the merchant a slightly higher margin on your purchases so allowing them to charge slightly less on my credit card purchase. Or else you're just giving them extra money and that's the end of it.
  - kerkeslager 6y ago
    > If you're paying cash you're not paying anything to the credit card companies. What you are doing is subsidizing my rewards cash back Please think through how pedantic this "correction" would be even if the credit card company were charitably passing all their fees to you as cash back, which I assure you, they are not doing.
    - dhosek 6y ago
      No, the point is that when you pay cash, you give more money to the merchant than I do. This enables the merchant to charge me less than they might if all their purchases were by credit card (although not necessarily—I remember reading somewhere that when Wendy's started accepting credit card payment, they saw their average purchase total go up. I know when I published a magazine, the percentage that I paid to the credit card processors for payments was worth the effort of not having to deal with paper checks—taking them to the bank for deposit, having the potential of getting hit with a fee if a check bounced, etc.), so your cash payment is subsidizing my convenience and cash back. The parent comment seemed to imply that the merchant paid a percentage to the credit card companies whether customers paid cash or credit.
      - kerkeslager 6y ago
        I understand what you were saying. I'm saying it's exactly the same thing. Let's say there are 3 customers who each buy a $98 item at a retailer: customers A, B, and C. If all three paid with cash, the retailer would receive $294, so the net change would be: Retailer: +$294 Customer A: -$98 Customer B: -$98 Customer C: -$98 But they don't all pay in cash: customer A pays cash, customer B pays with a card that gets 1% cash back, customer C pays with a card that doesn't get cash back. They all buy a $98 item at a retailer. The credit card company charges 3% in fees, or ~$3 for each of the CC customers, so the retailer is now making $288. So they raise the price of the item to $100. Now all three customers are paying $100 each, the retailer is making $294 again, and the credit card company is making $6. Customer B has a card that gets 1% cash, so they receive $1. Now the net change is: Retailer: +$294 CC: +$5 Customer A: -$100 Customer B: -$99 Customer C: -$100 Now, the way I'm summarizing this situation, is customers A and C have each given $2 to the credit card company, and customer B has given $1 to the credit card company. You're saying, customers A, B, and C have given $2 to the credit card company, and customer A (the one paying in cash) has given $1 to customer B (the one receiving cash back). That's technically not wrong--it's certainly a way to represent the cash flow that gets you to the same place--but it's a pedantic, inane difference, and it certainly isn't a "correction".

Yes. The US, however, does not. Additionally, the terms of use of credit card companies forbids charging a different price for cash versus card. This means that businesses which aren't large enough to negotiate different terms, have to raise prices across the board to cover the cost of credit card payments--even using cash, you're paying rent to the credit card companies.

ianhorn 6y ago
Maybe the simplest law to make it less of a shit deal for society is forbid the forbidding of charging different prices for cash vs card. Or something halfway, like forcing card companies to allow price differences up to x% of their charge.
- kerkeslager 6y ago
  > Maybe the simplest law to make it less of a shit deal for society is forbid the forbidding of charging different prices for cash vs card. Agreed. > Or something halfway, like forcing card companies to allow price differences up to x% of their charge. If I want to use cash, why should I subsidize any portion of the credit card company? I don't see the logic of a half-measure. I firmly believe that corporations (and other collectives) do not have rights, individuals have rights. This is a prime example where refusal to regulate corporations harms individuals.
dhosek 6y ago
If you're paying cash you're not paying anything to the credit card companies. What you are doing is subsidizing my rewards cash back by giving the merchant a slightly higher margin on your purchases so allowing them to charge slightly less on my credit card purchase. Or else you're just giving them extra money and that's the end of it.
- kerkeslager 6y ago
  > If you're paying cash you're not paying anything to the credit card companies. What you are doing is subsidizing my rewards cash back Please think through how pedantic this "correction" would be even if the credit card company were charitably passing all their fees to you as cash back, which I assure you, they are not doing.
  - dhosek 6y ago
    No, the point is that when you pay cash, you give more money to the merchant than I do. This enables the merchant to charge me less than they might if all their purchases were by credit card (although not necessarily—I remember reading somewhere that when Wendy's started accepting credit card payment, they saw their average purchase total go up. I know when I published a magazine, the percentage that I paid to the credit card processors for payments was worth the effort of not having to deal with paper checks—taking them to the bank for deposit, having the potential of getting hit with a fee if a check bounced, etc.), so your cash payment is subsidizing my convenience and cash back. The parent comment seemed to imply that the merchant paid a percentage to the credit card companies whether customers paid cash or credit.
    - kerkeslager 6y ago
      I understand what you were saying. I'm saying it's exactly the same thing. Let's say there are 3 customers who each buy a $98 item at a retailer: customers A, B, and C. If all three paid with cash, the retailer would receive $294, so the net change would be: Retailer: +$294 Customer A: -$98 Customer B: -$98 Customer C: -$98 But they don't all pay in cash: customer A pays cash, customer B pays with a card that gets 1% cash back, customer C pays with a card that doesn't get cash back. They all buy a $98 item at a retailer. The credit card company charges 3% in fees, or ~$3 for each of the CC customers, so the retailer is now making $288. So they raise the price of the item to $100. Now all three customers are paying $100 each, the retailer is making $294 again, and the credit card company is making $6. Customer B has a card that gets 1% cash, so they receive $1. Now the net change is: Retailer: +$294 CC: +$5 Customer A: -$100 Customer B: -$99 Customer C: -$100 Now, the way I'm summarizing this situation, is customers A and C have each given $2 to the credit card company, and customer B has given $1 to the credit card company. You're saying, customers A, B, and C have given $2 to the credit card company, and customer A (the one paying in cash) has given $1 to customer B (the one receiving cash back). That's technically not wrong--it's certainly a way to represent the cash flow that gets you to the same place--but it's a pedantic, inane difference, and it certainly isn't a "correction".