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>But how far does this go in explaining why merchants "choose" to participate in this program. The obvious answer would seem to be that they get no benefit from

• kasey_junk 3y ago
  Large merchants also pay much less for interchange generally.
  • bombcar 3y ago
    Small merchants negotiate with Stripe for a flat fee to accept all cards. Big merchants negotiate with the networks and pay varying prices for varying rewards amounts (or however they get the deal structured).
    • scarby2 3y ago
      Interestingly my flat fee with stripe is less than my reward rate on my credit card for some categories. It obviously is against the contract terms and probably considered fraud but I could theoretically make about 1.4-3 cents on the dollar (depending how you value points) by charging myself money.
      • ska 3y ago
        This comes up in the article.
        • scarby2 3y ago
          kinda, the article mentions that certain cards allow you on certain categories to get more than the interchange rate. what they don't mention in the article is that square charges the same fee to the business whatever kind of card is used, in this case whenever you use an amex card it's less profitable for square. If i were using a more traditional processor they may pass this cost on to me. also milage reward points can hit as high as 2.3 cents per dollar so assuming i want to fly to japan with ANA i could in theory get 8.6c in value of MR points per 2.6c i charge myself. However i would not expect to get away with this and i'm sure square would figure this out.
          • ska 3y ago
            He also mentions the possibility of adversarial collaboration, creating a scenario similar to yours…
• illusive4080 3y ago
  If only Walmart would take contactless payments.
  • jen20 3y ago
    Presumably they do not because they want to track you via your credit card number, and permitting Apple Pay (maybe others too) would hinder that.
    • illusive4080 3y ago
      I presume the same.
      • c0wb0yc0d3r 3y ago
        I always rate my experience 1 star when checking out at Walmart because of this. Probably won't change anything, but I feel I can't just stop going to Walmart because then Amazon is the only place left. Which is also fucked up but let's stay on topic.
    • vel0city 3y ago
      It's more that they want to try and convince people to pay with Walmart's own lower-cost (to them) app if you want to do contactless payments from your phone. If they made it easier to use Apple Pay, why would anyone ever use their app?
      • tzs 3y ago
        Why would paying with the Walmart app be lower cost to Walmart? Both the Walmart app and Apple Pay are essentially, as far as payments go, just digital wallets that you can store credit card information in. When you use them it is still a charge to one of those credit cards. It might actually cost Walmart more in my case, because the card I have on file has larger rewards for online purchases than it does for in-store purchases, and the Walmart app processes purchases as online even when made in-store. If I pay with the physical card it is processed as in-store.
• TimPC 3y ago
  This is actually the reason lower fee cards exist. If every card had a 5% transaction cost no merchant would sign up for that card brand. If the merchant is convinced their average transaction cost will be lower because some of the cards will be cheaper you can get away with some expensive cards.
  • ajdude 3y ago
    And this is why many small businesses in my area don't accept American Express cards full stop. Some don't even accept Discover.
    • Iulioh 3y ago
      Here in Europe I see AE accepted only for digital goods, high margin stuff or international (read American)chains
      • sofixa 3y ago
        American Express has really targeted the French market, there are all sorts of small stores (like bakeries, pharmacies (not American pharmacies - only medicine and very closely related stuff like creams and diapers) and similar size) with proud "Amex accepted here" signs. There was even an Amex program a few years back giving 5euros back on transactions of more than 20 euros in small shops like that.
    • i80and 3y ago
      This is interestingly regional: in the part of NJ where I live, every small business has an Amex "shop local" sticker on their front window
      • brewdad 3y ago
        AmEx has worked hard to keep their home turf around New York City friendly to their cards.
        • 3y ago
• JKCalhoun 3y ago
  Are they bound by contract not to offer a discount for casher buyers? I ask because when I was in Germany (and, granted, this was a few decades ago) you got some percent off the price if you paid cash. Merchants there seemed pretty credit-card averse.
  • gtirloni 3y ago
    Where I live it'd used to be possible to get a discount if you paid cash but it was deemed discriminatory against card holders and so it was banned. It's the same price regardless of payment method.
    • posix86 3y ago
      It removes the incentive for clients to use cash if a card option is available, makes them more used to paying by card, and hence decreases the competitiveness of merchants that don't offer card at all - until cards become so wide spread that many merchants don't even accept cash at all, like where I live. A bit hostile towards merchants, but very nice for consumers imo.
      • oarsinsync 3y ago
        > A bit hostile towards merchants, but very nice for consumers imo. It's nice for consumers who prefer to pay by card. It's hostile towards consumers who prefer to pay in cash.
        • posix86 3y ago
          Call me close minded but i see cash as an archaic, strictly inferior way of managing money. But to each their own.
          • rangestransform 3y ago
            I spend primarily on credit cards but I still think it’s important to preserve the ability to transact without the government knowing. Privacy is best preserved when data is not created at all, rather than when data is protected by law.
• ensignavenger 3y ago
  What I want to do is pass on the exact processing fee to my customers, then they can choose their payment method based on how much it is going to cost them. I might then choose to cover a portion of the fee for electronic transactions, because they mean I save money vs processing cash. But the customer would pay the excess. I would need a system that can display to the customer what fee they would be charged with their selected payment method, and be given an option to switch to a less expensive payment method.
  • hot_gril 3y ago
    I think there's some technical reason you can't do this, because even gas stations don't. They just have a separate cash/credit price.
  • Too 3y ago
    Ahhh yeees, the Ryanair strategy. Everyone's absolute favorite airline. How do i know you are being transparent with the surcharge? What if you add 2% for a card payment when your actual overhead is only 1%. I suspect this is the reason why EU made these type of schemes illegal many years back. It just creates bad incentives for stores to add random fees everywhere. How do you even calculate the processing fee of cash on a single transaction? A lot of comment here seem to assume cash is free, when in fact you need a safe, take time to go to the bank, security transfers, counting it, and so on.
  • i80and 3y ago
    Some donation platforms do this! They show and add on the processing fee for VISA/MC and Amex separately, and Amex is a little higher.
    • ensignavenger 3y ago
      Do they account for the different interchange rates on different classes of cards within a processing network? Not every merchant will want to be that granular, but I think it is worth it for big ticket items.
      • 3y ago
• morpheuskafka 3y ago
  That would cause a massive customer support and frustration problem as regular customers don't know or care how their card is classified and would complaint that it doesn't work. This would affect both the merchant and the issuer negatively.