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> A raw 3% of revenue is huge The business doesn't lose 3 percent of revenue, because it also saves money not dealing with cash: - eliminates cash theft - alw
by rsj_hn 5y ago
> A raw 3% of revenue is huge
The business doesn't lose 3 percent of revenue, because it also saves money not dealing with cash:
- eliminates cash theft - always a chronic problem for business.
- reduces costs of transporting/dealing with cash
- improves bookkeeping and paper work
and it gains revenue by dealing with people who don't use cash. A large number of customers don't make routine purchases with cash, and these are higher income customers.
So the choice isn't "pay 3% on X or don't pay 3% of X" The choice is "pay 3% on X" or "don't pay 3% on .9X".
- Jensson 5y ago> The business doesn't lose 3 percent of revenue, because it also saves money not dealing with cash: Debit cards circumvents the need for cash as well and are much cheaper. Everyone uses debit cards where I live, cash is very rare so companies doesn't need to deal with it much. So the difference is really just a straight 3% vs 0.15% with no other consequences.
- rsj_hn 5y agoThat's an interesting point. I'm not aware of any POS payment processor used by business that accepts debit cards but not credit cards. Not sure why that is.
- Jensson 5y agoI think it is mostly that it confuses buyers and that confusion costs more than credit cards costs. You'd need regulations to get around this.
- perl4ever 5y agoI think 3% is an exaggeration. And in fact, you can get 2% cash back. I don't think there's very much being charged when all is said and done. This seems to show the fees can be considerably less than 3%, although PayPal or Square will charge nearly that: https://www.fool.com/the-ascent/research/average-credit-card-processing-fees-costs-america/ https://www.fool.com/the-ascent/research/average-credit-card... https://www.mastercard.us/en-us/business/overview/support/merchant-interchange-rates.html https://www.mastercard.us/en-us/business/overview/support/me...