6 ms·

Girocard (in person) is 0.25%. GiroPay is 0.09€ per transaction, no matter how large. PayDirekt is 0.35€ per transaction, no matter how large. SEPA Debit is abo

Girocard (in person) is 0.25%. GiroPay is 0.09€ per transaction, no matter how large. PayDirekt is 0.35€ per transaction, no matter how large. SEPA Debit is about 0.10€ as well. Why are US-based payment services so fucking expensive?

mardifoufs 4y ago
Debit card transactions are basically free in the US too.
blntechie 4y ago
I assume because the US credit card customers are obsessed with reward points and miles and it need to be paid by someone. It's usually the merchants through high MDR. The merchants pass on the costs to the card customers or debit card/cash payers.
- SeripisChad 4y ago
  Prior to those gimmicks the rates where higher than now. I hoped Google to follow through with their pricing cuts, but yielded rather quickly.
- fredophile 4y ago
  As a consumer in the US I always pay with a credit card when I can. The businesses have already baked the credit card fees into their pricing so I might as well get a few percent back from my card plus the extra purchase protection, etc.
  - dylan604 4y ago
    There are companies that offer lower prices when paying cash/debit specifically to only charge the credit card fees to those using credit cards. It used to be a big thing in the US at gas stations where they advertised the 2 different prices. I don't know the details, but at some point that stopped happening. I was under the impression some rule change, but it is making a come back. I don't know if some consumer protection laws were made the revoked or whatnot, but it is possible to not have to automatically be charged for credit card fees if you're not using credit.
    - jonasdegendt 4y ago
      > It used to be a big thing in the US at gas stations Hah, as a European that lived in California for a while this always seemed so odd to me. I just dug up a picture of my car that I took at a gas station, and there's prices in the background: Cash $2.94, Credit $3.11, for regular gas, and the date on the picture is the 4th of July, 2017. That's quite the difference but roughly in line with credit card fees. It makes sense that gas stations would do this, it's a pretty slim margin business.
      - hakfoo 4y ago
        In some situations, there is an allowance to demand a surcharge for accepting a card. It comes with very narrowly standardized rules, because it basically is supposed to be "exactly the cost to accept the card". From what I've seen it turns into a compliance mess outside of in-person retail, because many states have regulations and gimmicks on top of it, and the system will end up kicking out a rejection code if you ask for the wrong amount, or on the wrong customer. It's obviously intended that you just bake the cost in for everyone because that avoids people blaming the card networks for higher prices. The only time I've seen it in person was when I went to make the initial payment on an auto lease; the dealer had a sign up saying that there would be a 3% credit surcharge, which exceeded the 2% cash back I expected from Citibank, so I used a debit card instead.
      - ghaff 4y ago
        You still sometimes see this. My understanding is that it's usually against merchant credit card contracts however. You also used to see cash only stations but that's almost certainly vanishingly rare these days.
        dylan604 4y ago
        based on experiences with vending machines, could you imagine the nightmare of cash only pay-at-the-pump? <shudder> we'd have gas lines like the 70s not because of shortages, but just from people trying to pull their bills along the corner of the pump to flatten them out.
slashink 4y ago
Credit card reward systems & points are not free. Comes at the cost of higher transaction fees that eventually get passed on to the customer. I’ve found these schemes much less prevalent in Europe (with the exception of AMEX, but half of the vendors in Europe seems to not accept that anyway). On top of that, in the EU, interchange fees are capped to 0.3% of the transaction for credit cards and to 0.2% for debit cards. This prevents it from becoming the points hell of the US market.
- ghaff 4y ago
  Although I'm pretty sure most of the rewards go to people willing to pay for premium cards because they make a lot of transactions. Do the people with free credit cards subsidize them? Maybe but it's not obvious. Of course, the people with the biggest reward cards are probably not paying much interest or late fees either.
  - NavinF 4y ago
    > Do the people with free credit cards subsidize them? Depends on the card. Interchange fees are much lower for basic cards so if you get at least 2% cashback, that's break-even. Of course cards with annual fees get a lot more rewards in the form of transferable airline points and have much higher interchange fees to cover that.
    - iancarroll 4y ago
      The interchange fee differences between credit card types are not very high, usually around 0.5%. You can see the public Visa interchange rates at https://usa.visa.com/content/dam/VCOM/download/merchants/visa-usa-interchange-reimbursement-fees.pdf https://usa.visa.com/content/dam/VCOM/download/merchants/vis.... Credit card companies play a lot of games with this too and will “upgrade” your card type if they think it’s worth it, even if you don’t make any changes. The biggest variances involve non-exempt (Durbin amendment) debit cards.
      - NavinF 4y ago
astura 4y ago
The EU has a cap on interchange fees, by law. The US has no such law, so they charge more, because they can. Some of the interchange fees are paid back to the customer in the form of cash back and other perks and rewards.
nightpool 4y ago
All of the services you mentioned are debit cards, not credit cards. US debit cards are basically free as well, it's just that nobody uses them.
- dylan604 4y ago
  >it's just that nobody uses them. that's a bold claim. not everyone bows down to the uber robber barons of the credit companies. i have no credit cards and am surviving life just fine thank you very much. i know i'm not alone.
  - refurb 4y ago
    But you’re paying the fee for credit cards anyways, just not getting anything in return including consumer protection that credit cards offer.
    - dylan604 4y ago
      Yeah, no. In another comment, I mentioned shopping at places that give discounts for using cash/debit instead of credit. No all proprietors are greedy assholes to charge everyone for services not used. I choose to do business with these shops.
      - refurb 4y ago
        Sure some do, but it’s an exception rather than a rule. Generally you’re already paying the market up for the credit card fee but get none of the benefits. Id rather take the benefits.
  - optymizer 4y ago
    this discussion would be more productive with some data: * 83% of adults have at least one credit card * 41% adults actually used a credit card in 2020 https://www.federalreserve.gov/publications/2021-economic-well-being-of-us-households-in-2020-banking-and-credit.htm https://www.federalreserve.gov/publications/2021-economic-we...
ymolodtsov 4y ago
Interchange fees were legally limited in the EU, not sure about the UK specifically. The reason why EU banks don't have these fancy premium credit cards with 2/3/5% cashback.

mardifoufs 4y ago

Debit card transactions are basically free in the US too.

blntechie 4y ago

I assume because the US credit card customers are obsessed with reward points and miles and it need to be paid by someone. It's usually the merchants through high MDR. The merchants pass on the costs to the card customers or debit card/cash payers.

SeripisChad 4y ago
Prior to those gimmicks the rates where higher than now. I hoped Google to follow through with their pricing cuts, but yielded rather quickly.
fredophile 4y ago
As a consumer in the US I always pay with a credit card when I can. The businesses have already baked the credit card fees into their pricing so I might as well get a few percent back from my card plus the extra purchase protection, etc.
- dylan604 4y ago
  There are companies that offer lower prices when paying cash/debit specifically to only charge the credit card fees to those using credit cards. It used to be a big thing in the US at gas stations where they advertised the 2 different prices. I don't know the details, but at some point that stopped happening. I was under the impression some rule change, but it is making a come back. I don't know if some consumer protection laws were made the revoked or whatnot, but it is possible to not have to automatically be charged for credit card fees if you're not using credit.
  - jonasdegendt 4y ago
    > It used to be a big thing in the US at gas stations Hah, as a European that lived in California for a while this always seemed so odd to me. I just dug up a picture of my car that I took at a gas station, and there's prices in the background: Cash $2.94, Credit $3.11, for regular gas, and the date on the picture is the 4th of July, 2017. That's quite the difference but roughly in line with credit card fees. It makes sense that gas stations would do this, it's a pretty slim margin business.
    - hakfoo 4y ago
      In some situations, there is an allowance to demand a surcharge for accepting a card. It comes with very narrowly standardized rules, because it basically is supposed to be "exactly the cost to accept the card". From what I've seen it turns into a compliance mess outside of in-person retail, because many states have regulations and gimmicks on top of it, and the system will end up kicking out a rejection code if you ask for the wrong amount, or on the wrong customer. It's obviously intended that you just bake the cost in for everyone because that avoids people blaming the card networks for higher prices. The only time I've seen it in person was when I went to make the initial payment on an auto lease; the dealer had a sign up saying that there would be a 3% credit surcharge, which exceeded the 2% cash back I expected from Citibank, so I used a debit card instead.
    - ghaff 4y ago
      You still sometimes see this. My understanding is that it's usually against merchant credit card contracts however. You also used to see cash only stations but that's almost certainly vanishingly rare these days.
      - dylan604 4y ago
        based on experiences with vending machines, could you imagine the nightmare of cash only pay-at-the-pump? <shudder> we'd have gas lines like the 70s not because of shortages, but just from people trying to pull their bills along the corner of the pump to flatten them out.

slashink 4y ago

Credit card reward systems & points are not free. Comes at the cost of higher transaction fees that eventually get passed on to the customer. I’ve found these schemes much less prevalent in Europe (with the exception of AMEX, but half of the vendors in Europe seems to not accept that anyway). On top of that, in the EU, interchange fees are capped to 0.3% of the transaction for credit cards and to 0.2% for debit cards. This prevents it from becoming the points hell of the US market.

ghaff 4y ago
Although I'm pretty sure most of the rewards go to people willing to pay for premium cards because they make a lot of transactions. Do the people with free credit cards subsidize them? Maybe but it's not obvious. Of course, the people with the biggest reward cards are probably not paying much interest or late fees either.
- NavinF 4y ago
  > Do the people with free credit cards subsidize them? Depends on the card. Interchange fees are much lower for basic cards so if you get at least 2% cashback, that's break-even. Of course cards with annual fees get a lot more rewards in the form of transferable airline points and have much higher interchange fees to cover that.
  - iancarroll 4y ago
    The interchange fee differences between credit card types are not very high, usually around 0.5%. You can see the public Visa interchange rates at https://usa.visa.com/content/dam/VCOM/download/merchants/visa-usa-interchange-reimbursement-fees.pdf https://usa.visa.com/content/dam/VCOM/download/merchants/vis.... Credit card companies play a lot of games with this too and will “upgrade” your card type if they think it’s worth it, even if you don’t make any changes. The biggest variances involve non-exempt (Durbin amendment) debit cards.
    - NavinF 4y ago

astura 4y ago

The EU has a cap on interchange fees, by law. The US has no such law, so they charge more, because they can. Some of the interchange fees are paid back to the customer in the form of cash back and other perks and rewards.

nightpool 4y ago

All of the services you mentioned are debit cards, not credit cards. US debit cards are basically free as well, it's just that nobody uses them.

dylan604 4y ago
>it's just that nobody uses them. that's a bold claim. not everyone bows down to the uber robber barons of the credit companies. i have no credit cards and am surviving life just fine thank you very much. i know i'm not alone.
- refurb 4y ago
  But you’re paying the fee for credit cards anyways, just not getting anything in return including consumer protection that credit cards offer.
  - dylan604 4y ago
    Yeah, no. In another comment, I mentioned shopping at places that give discounts for using cash/debit instead of credit. No all proprietors are greedy assholes to charge everyone for services not used. I choose to do business with these shops.
    - refurb 4y ago
      Sure some do, but it’s an exception rather than a rule. Generally you’re already paying the market up for the credit card fee but get none of the benefits. Id rather take the benefits.
- optymizer 4y ago
  this discussion would be more productive with some data: * 83% of adults have at least one credit card * 41% adults actually used a credit card in 2020 https://www.federalreserve.gov/publications/2021-economic-well-being-of-us-households-in-2020-banking-and-credit.htm https://www.federalreserve.gov/publications/2021-economic-we...

ymolodtsov 4y ago

Interchange fees were legally limited in the EU, not sure about the UK specifically. The reason why EU banks don't have these fancy premium credit cards with 2/3/5% cashback.