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Are these numbers truly non-negotiable? If that's the case, what's the incentive for a company like Costco to have exclusivity with American Express (who normal
by EvanKelly 14y ago
Are these numbers truly non-negotiable? If that's the case, what's the incentive for a company like Costco to have exclusivity with American Express (who normally charges a higher than average fee)?
I've always assumed (maybe erroneously) that Costco received a lower processing fee in exchange for the exclusivity which pushes more transactions.
- shuzchen 14y agoI don't disagree (in fact, I think it probably is the case that they get a lower rate for being exclusive), but just to add: Costco also has a partnership with amex issuing their Costco branded credit cards (which isn't a store only card, it works out in the wild), and Costco gets some portion of the revenue whenever that card is used. Restricting you to amex also has a benefit of increasing the likely-hood that consumers will sign up for the Costco cc.
- EvanKelly 14y agoThat makes a lot of sense, and it's also clear that transparency regarding rates isn't exactly in the vendor or the credit card companies' best interest.
- abalone 14y agoAmEx is negotiable (though usually it's the most expensive.. and Square cannot offer AmEx exclusivity like Costco can). Notice I said Visa & MC are the standardized, non-negotiable rates. But you're right, they're not totally non-negotiable. Supposedly very huge retailers like Walmart get better rates. But Walmart does probably 20X Square's volume, even with Starbucks folded in.