4 ms·

> everyone pays it "pays it" is relative. The merchant is generally charging 3~6% more than they would otherwise if they didn't use a CC. Said differently, ass

by mbesto 2y ago

> everyone pays it "pays it" is relative. The merchant is generally charging 3~6% more than they would otherwise if they didn't use a CC. Said differently, assuming all other things equal, buying the same good for the same price from two identical stores, one who only accepts CCs and one who accepts cash, the one who accepts cash will profit more. Therefore they can, in theory, charge less for their good. > being cheaper for the CC holder due to cashback "cheaper" how? The spread is effectively paid for by the merchant (their processing fee is 99% of the time higher than the cashback bonus a consumer earns) which in turn goes to vendors (like credit card providers, payment processors, etc) who then allocate costs against things like customer service for charge disputes. EDIT: The spread is the original ~3% I'm referring to, which would be an average 1.5% cashback against a 4.5% payment processing charge for a delta of 3%. In many cases this is lower (or null) but you get the point.

pests 2y ago
If both customers are shopping at the same store, and one pays in card and one pays in cash, the card holder pays less due to cashback. I agree the prices will be higher than at a store that does not accept credit cards due to not having to pay the fees. The only way I see the extra 3% for cardholders is because they are "forced" to shop in card-accepting establishments which will have higher costs to cover fees while the cash user can choose the cheaper cash vendor.
- mbesto 2y ago
  > the card holder pays less due to cashback. At a point in time basis, you are correct. > The only way I see the extra 3% for cardholders is because they are "forced" to shop in card-accepting establishments which will have higher costs to cover fees while the cash user can choose the cheaper cash vendor. Correct. And my point is that this 3% tax gives you the feature to dispute the charge.

by mbesto 2y ago

pests 2y ago

If both customers are shopping at the same store, and one pays in card and one pays in cash, the card holder pays less due to cashback. I agree the prices will be higher than at a store that does not accept credit cards due to not having to pay the fees. The only way I see the extra 3% for cardholders is because they are "forced" to shop in card-accepting establishments which will have higher costs to cover fees while the cash user can choose the cheaper cash vendor.

mbesto 2y ago
> the card holder pays less due to cashback. At a point in time basis, you are correct. > The only way I see the extra 3% for cardholders is because they are "forced" to shop in card-accepting establishments which will have higher costs to cover fees while the cash user can choose the cheaper cash vendor. Correct. And my point is that this 3% tax gives you the feature to dispute the charge.