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No, the merchant pays, although recently more and more have been handing off the 3% to the consumer by giving a lower cash price. But well, most people don't ha
by satvikpendem 5mo ago
No, the merchant pays, although recently more and more have been handing off the 3% to the consumer by giving a lower cash price. But well, most people don't have cash so that's essentially a convenience fee.
- AnthonyMouse 5mo agoThe credit card companies tell you that the merchant pays. Cost incidence doesn't work like that. If every seller in a fungible commodity market has the same additional cost, the price is going up by that amount.
- deleted 5mo ago[deleted]
- mercutio2 5mo agoYes, but you’re perhaps missing OP’s point? Incidence is very much on customers, but (high interchange fee) credit card users are getting a rebate of most, if not all, of that. It’s the cash users who AREN’T getting a rebate, and thus the incidence is on them (and people using other low-or-zero cashback payment methods).
- AnthonyMouse 5mo agoThe incidence is on everyone. Paying 3% more or, for small purchases, >10% more is a net loss even if you get 2% back. Meanwhile merchants are increasingly offering a lower price for paying cash, and the ones offering that will generally have the same credit prices as the ones who don't, so paying with a card is paying 3%+ more to get 2% back -- and not everyone even gets 2% back. People with poor credit typically aren't offered those cards.