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You’re on the right track, but have the wrong specifics. A merchant accepting card payments might pay “sticker rate” for processing, 3%, at the outset; but, th
by clintonb 4y ago
You’re on the right track, but have the wrong specifics.
A merchant accepting card payments might pay “sticker rate” for processing, 3%, at the outset; but, they eventually get IC+ pricing as their volume increases. This might be closer to 1-2%.
If they pay 5% to a BNPL, that extra 2-4% is meant to cover the interest of the “loan” if the customer doesn’t pay back on schedule.
- jacobsimon 4y agoSure but the merchant isn’t literally paying interest - yes they get charged a fee which helps subsidize an interest-free loan, but that fee is not interest nor is the merchant party to any loans that the consumer enters. The merchant gets paid more or less immediately minus a fee - similar to how a credit card transaction works.