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The invisible fee is paid by the merchant, not the consumer. And fees aren't 4%, they are generally 1.3% to 3.5%. With higher fees for American Express, and m
by btilly 6y ago
The invisible fee is paid by the merchant, not the consumer. And fees aren't 4%, they are generally 1.3% to 3.5%. With higher fees for American Express, and merchant types with higher fraud rates. (American Express also offers greater rewards to consumers...)
In the end, aside from the complicated consumer reward part, the amount that the credit card companies get isn't that different from the European system.
- jstanley 6y ago> The invisible fee is paid by the merchant, not the consumer. But the customer pays the merchant. It's all paid by the customer.
- btilly 6y agoThe customer is paying whether or not they use a credit card. However actual businesses have overhead for dealing with physical cash as well. It is slower at the teller, needs to be manually counted and recounted, transported (sometimes with security) and so on. It is not clear whether real costs of handling money are greater or less than merchant fees.