6 ms·
Important context: this is US thing. EU capped interchange fees at 0.2% for debit and 0.3% for credit cards. So in US card processing is x5-x10 more expensive.
by SXX 2mo ago
Important context: this is US thing. EU capped interchange fees at 0.2% for debit and 0.3% for credit cards.
So in US card processing is x5-x10 more expensive.
- criddell 2mo agoHow generous are credit card rewards in the EU?
- bluebarbet 2mo agoPresumably not very, because the large majority of Europeans do not use credit cards.
- SXX 2mo agoI'd say it heavily depend on country. In some of them they are popular, but in others even debit cards is something only few people have.
- SXX 2mo agoNormal cards not very generous. Fintech can sometimes give 1% cashback capped at 30-50-100 EUR. Some weird crypto stuff can give more cashback, but it mostly for scheming nerds.
- AnssiH 2mo agoMy understanding is that they are much less generous on average compared to U.S. E.g. for now I have the most premium card offered by my bank (50€/mo), and it gets me extra product insurance, rental car insurance, travel insurance, free lounge access, and some other things like that, but no cashback or similar. I think some premium cards do offer cashback nowadays, but they are in the minority. Some cards also offer airline reward points. My experience is limited to Finland, though.
- Hikikomori 2mo agoUS are not generous either. Merchant increase prices by 5% to cover costs, you get 2.5% cashback and visa/your bank pockets the other 2.5% you're paying.
- throwaway_20357 2mo agoUsually ~1%. Some direct cashback, some via rewards points (e.g. 1.5 AMEX MRP earned per EUR are roughly worth 1ct).
- graemep 2mo agoThere are similar caps in the UK and most credit card rewards seem to be low after an initial offer period. There are some specific discounts and benefits but not cash rewards. It is illegal (not banks will not let you, actual legislation) here to charge more for card payments or discount for cash or bank transfer.
- edent 2mo agoIn the UK (which broadly follows the same rules), I get 0.25% with a Visa and 1.25% with Amex. Sometimes there are introductory offers for a few months.
- Symbiote 2mo agoAnd as a result of that, Amex is often not accepted.
- SXX 2mo agoAt least in the UK Amex interchange fees are not capped like Visa and Mastercard.
- Steve44 2mo agoI only get cashback on my Amex, nothing with Visa or Mastercard; perhaps I could shop around but over 90% goes on my Amex so haven't bothered to.
- amarcheschi 2mo agoWith sumup I get 0.5% cashback up to a whopping 10€/ month lol. There are other cards giving cashback, I think Amex blu has a 1% with no upper bound of monetary cashback
- LeonidasXIV 2mo agoAmex has very spotty acceptance rate in Europe.
- skeletal88 2mo agoThere are basically none, because the fees are low and card issuers are not allowed to rob retailers with insane fees. If you have a cafe or restaurant where margins are already low then it would be crazy to pay additional 2-3% tax on every payment. No one wants to accept amex here.
- tiffanyh 2mo agoTo be more specific, this is a US credit card topic. Debit card fees are capped in the US, yet I’ve never received a discount from a merchant for paying with debit instead of credit. As such, I just pay with credit and have never understood this argument.
- post-it 2mo agoThat's what makes it a wealth transfer, from debit card users to you.
- iso1631 2mo agoIn my country card fees are less than cash fees, so I guess that's a wealth transfer from card payers to cash payers?
- tiffanyh 2mo agoThat’s a great point. Managing cash for a merchant also brings real costs as well. You have to take it to the bank or pay a service to pick up cash. You’re way more likely to have “leakage” when any cashier can pocket cash. Etc
- deleted 2mo ago[deleted]
- SkiFire13 1mo agoThe costs of credit cards are higher in part because of the reward programs for using such cards. That's where the wealth transfer happens, and there's nothing like this for cash.
- kevin_thibedeau 2mo agoI stuck to a debit card for decades but got tired of the discrimination after it was rejected by the IRS as validation for COVID stimulus. Gas stations could be problematic. Canada could be problematic. Everything works with a credit card. If you are a responsible spender you may as well reap the benefit of the wealth transfer.
- account42 2mo agoStill affects us as sticker prices are not set independently. Even if you exclusively buy locally, $ = € is extremely common for MSRP.
- dtech 2mo agoThat's because the $ prices are without VAT
- Torkel 2mo agoHow does it work if I have a US credit card and use it abroad? Do I still get the kickback even though the merchant fee is capped? This feels like a potential arbitrage opportunity... I live in Sweden, but if I can use a US credit card I can get high rewards?
- tiffanyh 2mo agoIssuing banks typically add an FX fee to the cardholder for cross border transactions. Not always, but many times they do.
- tialaramex 2mo agoEven if the FX is notionally "free" they pick the rates. So they can set those rates to generate exactly the same profit for them as with fees. You will probably not see rates that are even competitive with a dodgy FX cash place at an airport, let alone with the numbers you've seen on financial networks for what FX transactions by banks cost, but you feel happy because there was "no fee".
- gruez 2mo ago>they pick the rates. So they can set those rates to generate exactly the same profit for them as with fees. No, the rate is set by the card network, eg https://usa.visa.com/support/consumer/travel-support/exchange-rate-calculator.html https://usa.visa.com/support/consumer/travel-support/exchang...
- tialaramex 2mo agoHuh. I wonder how long that's been true. I guess I haven't been to America since last century, but I could have sworn I had zero fee but unreasonable FX rates when I was in Poland which can't have been more than 25 years ago.
- brainwad 2mo ago
- 59percentmore 2mo agoThings that are more expensive in the US for no reason: Healthcare Internet access College sighs and adds "The very act of making a purchase" At least we have cheap gas? farts
- api 2mo agoInternet access sort of has a reason: the US is geographically huge and more sprawled out. But that's not enough to explain all of the difference.
- Ekaros 2mo agoThat really explains only small parts. Even the horrible suburbs have little real reason to be that expensive. In the end it is really about lacking actual free market and enabling corporate capture as voted by the voters.
- alistairSH 2mo agoThat might explain internet pricing in North Dakota, but it doesn't explain it in NYC or DC or LA.
- joenot443 2mo agoI pay $40/mo for 500mbps in my Bushwick apartment - is that considered expensive?
- alistairSH 2mo agoBy US standards? No, probably not. But, a quick search indicates you can get similar broadband in Glasgow, Scotland for ~15 GBP/month. And Rome, Italy looks like ~25EUR/month.
- stefanfisk 2mo agoI’m in Stockholm, and our condo HOA (BRF) includes 1Gbps per unit in the fee for all units because billing individually would cost more in admin than the service itself. We have FTTP and then cat6 to each unit.
- gorgmah 2mo agoIt's partly true: this only applies to consumer cards. That's why many EU banks still offer corporate credit cards with huge cashback etc. For example, revolut offers no cashback in France on their metal cards if you have a consumer account, but up to 1% cashback on the same card if you have a "freelance" account. https://www.revolut.com/fr-FR/metal/ https://www.revolut.com/fr-FR/metal/ Second thing: interchange fees are not the only fees that your typical store has to pay, the total fees are much higher. I think the EU essentially capped Visa/Mastercard profit in the EU, more than they capped small business fees for card payment.
- Steve44 2mo ago> That's why many EU banks still offer corporate credit cards with huge cashback et We're a business in the UK and the charges for accepting Business credit cards is much higher. I don't have current charges to hand, but in 2023 Personal Credit Cards were 1.97% whilst for Business Credit Cards we were charged 3.43%. That's probably how they afford such high cashback/loyalty schemes. I think we're paying about half those rates now. I know Amex is somewhere between Personal and Business charges.
- gorgolo 2mo agoNever heard about this before but it sounds crazy. Are you able to control this somehow, like reject business cards?
- Symbiote 2mo agoIn Denmark many retailers pass on the charge for business cards. For example it's often printed on the bottom of a restaurant menu.
- Steve44 2mo agoI don't think we can selectively reject them, it's not anything I've looked into though so not certain about that. Although we are a B2B business, most of our card transactions are from business owners personal cards so it's not really an issue. We occasionally monitor the split and if it became significant we'd need to look at addressing it, probably by increasing prices for those customers.
- JKCalhoun 2mo agoIn Germany I saw they charged extra for using my credit card. A U.S. retailer told me the credit card companies won't allow that in the U.S.?
- wookmaster 2mo agoThey charge you extra, they just make it invisible. The store has to pay the fees and it causes prices to go up for everyone to cover them.
- hypeatei 2mo agoThey can't make it an explicit line item of "3% surcharge" or whatever. Instead, the business will raise prices across the board and offer a "cash discount" of 3%
- toast0 2mo ago> A U.S. retailer told me the credit card companies won't allow that in the U.S.? That used to be the case, but it's not current. Merchants can charge a credit card fee, and many do. Many merchants near me (washington state) don't, but those that do add a fixed fee of 1-3% for credit.
- TacticalCoder 2mo ago[dead]
- arpinum 2mo agoEU only capped fees for 4 party systems, and only for consumer credit cards. business credit cards and 3 party systems (American Express for example) are not part of the cap and you can get more rewards with these card types.
- foepys 2mo agoQuite a few places do not accept Amex and many that do probably don't know they do or they would disable it.