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4% seems high. Quick googling in the US (which has high rates) shows 1.5-3.5%, avg of 2%

by ezfe 7mo ago

Groxx 7mo ago
You might be surprised to hear that my small business sometimes sees fees at 11%. We blocked that card processor, obviously. But the % is very much not constant across e.g. Visa, often every purchase in a day is slightly different, and we can't even tell people what the rate is for their purchase due to a couple layers in between (still figuring out if we can fix that). It's vile, and probably should be illegal to not pass through the cost visibly.
- ezfe 7mo ago
  Stripe is 2.9%+30¢ right, and that’s the advertised rate. So I assume any business seeing averages higher than that can be avoided by using a platform like Stripe.
  - Spooky23 7mo ago
    Small merchants are people, and people vary in their intelligence/savvyness and may have other issues like poor credit or high chargebacks that they usually forget to mention. Some people roll the cost of the terminal into a higher fee as well. I helped out a friend who owns a deli when he took over from his parents. His dad saw cash as a way to avoid taxation and had some awful payment processor where they paid a high fee and was renting a POTS based terminal - $60/mo to Verizon and $30/mo for the terminal. Now he keeps one set of books, and raised his average sale by about 10%. Their catering business, which drives profits, are up significantly with online ordering through the POS. Ditto with a non-profit I was on the board of. Pushing Venmo and Square for donations increased donations by like 30% and reduced shrink at fundraisers. Anyone who claims they can’t afford a 3% fee is going out of business anyway.
  - havaloc 7mo ago
    The Stripe rate is a careful blend. There are many cards that are cheaper to process and there's probably a few that are more expensive to process at that rate, it works out in the wash in favor of Stripe. Also, that 30 cents is a large percentage if you're looking at a $5 transaction, for example (6%!) See the "raw" rates here: https://www.mastercard.com/content/dam/mccom/us/business/documents/merchant-rates-2025-2026.pdf https://www.mastercard.com/content/dam/mccom/us/business/doc...
- fragmede 7mo ago
  Why not just pay Stripe/Adyen/Braintree to smear the fees to 2.9% + $0.30?
- Groxx 7mo ago
  To respond in bulk: > complaint: credit card fees are high and maliciously opaque. > suggestion: have you considered adding another company in the middle? ... do y'all understand that those middle companies profit from being in the middle? that profit comes from somewhere, where oh where could it be... why on earth would you expect them to improve your income? you are literally buying convenience from them. or is this just thinly disguised advertising?
MengerSponge 7mo ago
There are a few cards that offer 2% cash back with no annual fee. No chance their fee is 1.5-2%
- wccrawford 7mo ago
  Cards don't make money from their fees. They make money from people who fail to pay and then pay the ridiculous interest.
  - apparent 7mo ago
    Do people who pay ridiculous interest qualify for 2% cards? Honest question; I don't carry a balance so have no idea what is advertised at other types of consumers.
    - SoftTalker 7mo ago
      Why not? I'd gladly pay you 2% of $1,000 if you pay me 21%
      - apparent 7mo ago
        I was just under the impression that the cards with the best benefits were somewhat harder to get. I do understand that credit card companies make money on interest and late fees, so they should find consumers to be attractive so long as they ultimately pay the bill/interest. I guess the question is whether they can distinguish between people who are going to carry a balance but ultimately pay and people who are a true default/bankruptcy risk.
    - fn-mote 7mo ago
      What matters is their credit rating, not how much they carry as a balance. (However, that can affect their credit rating.)
  - bumby 7mo ago
    Interchange fees seem to be a sizable portion of revenue. Discover has listed them as 29% of revenue, BoA at ~$10B annually…

4% seems high. Quick googling in the US (which has high rates) shows 1.5-3.5%, avg of 2%

by ezfe 7mo ago

4% seems high. Quick googling in the US (which has high rates) shows 1.5-3.5%, avg of 2%

Groxx 7mo ago

You might be surprised to hear that my small business sometimes sees fees at 11%. We blocked that card processor, obviously. But the % is very much not constant across e.g. Visa, often every purchase in a day is slightly different, and we can't even tell people what the rate is for their purchase due to a couple layers in between (still figuring out if we can fix that). It's vile, and probably should be illegal to not pass through the cost visibly.

ezfe 7mo ago
Stripe is 2.9%+30¢ right, and that’s the advertised rate. So I assume any business seeing averages higher than that can be avoided by using a platform like Stripe.
- Spooky23 7mo ago
  Small merchants are people, and people vary in their intelligence/savvyness and may have other issues like poor credit or high chargebacks that they usually forget to mention. Some people roll the cost of the terminal into a higher fee as well. I helped out a friend who owns a deli when he took over from his parents. His dad saw cash as a way to avoid taxation and had some awful payment processor where they paid a high fee and was renting a POTS based terminal - $60/mo to Verizon and $30/mo for the terminal. Now he keeps one set of books, and raised his average sale by about 10%. Their catering business, which drives profits, are up significantly with online ordering through the POS. Ditto with a non-profit I was on the board of. Pushing Venmo and Square for donations increased donations by like 30% and reduced shrink at fundraisers. Anyone who claims they can’t afford a 3% fee is going out of business anyway.
- havaloc 7mo ago
  The Stripe rate is a careful blend. There are many cards that are cheaper to process and there's probably a few that are more expensive to process at that rate, it works out in the wash in favor of Stripe. Also, that 30 cents is a large percentage if you're looking at a $5 transaction, for example (6%!) See the "raw" rates here: https://www.mastercard.com/content/dam/mccom/us/business/documents/merchant-rates-2025-2026.pdf https://www.mastercard.com/content/dam/mccom/us/business/doc...
fragmede 7mo ago
Why not just pay Stripe/Adyen/Braintree to smear the fees to 2.9% + $0.30?
Groxx 7mo ago
To respond in bulk: > complaint: credit card fees are high and maliciously opaque. > suggestion: have you considered adding another company in the middle? ... do y'all understand that those middle companies profit from being in the middle? that profit comes from somewhere, where oh where could it be... why on earth would you expect them to improve your income? you are literally buying convenience from them. or is this just thinly disguised advertising?

MengerSponge 7mo ago

There are a few cards that offer 2% cash back with no annual fee. No chance their fee is 1.5-2%

wccrawford 7mo ago
Cards don't make money from their fees. They make money from people who fail to pay and then pay the ridiculous interest.
- apparent 7mo ago
  Do people who pay ridiculous interest qualify for 2% cards? Honest question; I don't carry a balance so have no idea what is advertised at other types of consumers.
  - SoftTalker 7mo ago
    Why not? I'd gladly pay you 2% of $1,000 if you pay me 21%
    - apparent 7mo ago
      I was just under the impression that the cards with the best benefits were somewhat harder to get. I do understand that credit card companies make money on interest and late fees, so they should find consumers to be attractive so long as they ultimately pay the bill/interest. I guess the question is whether they can distinguish between people who are going to carry a balance but ultimately pay and people who are a true default/bankruptcy risk.
  - fn-mote 7mo ago
    What matters is their credit rating, not how much they carry as a balance. (However, that can affect their credit rating.)
- bumby 7mo ago
  Interchange fees seem to be a sizable portion of revenue. Discover has listed them as 29% of revenue, BoA at ~$10B annually…