4 ms·

Using a credit card? Watch out for the 'checkout fee'

3 points by codegeek 14y ago

christiangenco 14y ago
Thank God. I almost feel bad using my Visa for small purchases when I know I have cash (I'll sometimes ask the person checking me out which they prefer). > Many big players in the retail industry have been up in arms about the settlement. Stores from the nation's largest retailer down to small businesses have lamented the agreement, claiming that it transferred the wrongdoings of credit card issuers to the consumer...Wal-Mart (WMT, Fortune 500), Macy's (M, Fortune 500), JCPenney (JCP, Fortune 500), Limited Brands (LTD, Fortune 500), Gap Inc (GPS, Fortune 500). and The Neiman Marcus Group were among those who joined the NRF in claiming that "raising consumer prices by adding an 'interchange tax' is no remedy for Visa's and MasterCard's continuing monopoly abuse." Yes, this does add the option to put the credit card company's extortionist fee on the back of the consumer, but from what I can tell it's completely optional for the merchant to do this, so I don't understand these big company's motivations (they can just continue not to charge the customers the fee). Perhaps it's linked to these companies having their own co-branded cards that let them split the fee's difference? Not sure what's going on here. The bottom line is that this is incredibly good news for post-credit card tech companies. As a consumer, I'm going to be presented with three options at checkout: 1. Pay with cash, which means you have to carry the cash and then carry the annoying small pieces of metal you're going to get back with another piece of paper that's the only proof you have that this transaction ever took place. This option sucks, and is the reason why people for so long have opted to... 2. Pay with your credit card, but now you have to pay an extra 2.3% fee that before was getting footed by the business. You also have to carry your card around with you, make sure there's money on it, and be super careful you don't loose it. Which leaves... 3. Pay with your smartphone. This will soon be by far the easiest option (in the case of Square Checkout, all you have to do is tell them your name), and one of the most competitive, which will drive fees down. The customer doesn't have to carry anything extra with them, their money is as secure as their smart phone is, and fees will be minimal and only driven lower with competition. Just brace yourselves for the standards war. I'm just waiting for the day when I can reduce my "keys, wallet, phone" door check to "phone."
- ars 14y ago
  There hasn't been much competition with credit cards, why do you expect it with smartphones? Do you envision the smartphone being like cash - with no recourse? Or like credit cards where chargebacks are possible? The second option is one thing that increases the fees.
- army 14y ago
  I think it's unlikely that many retailers are going to pass along the fee via a surcharge. The law in Australia now allows retailers to impose surcharges or minimums for credit cards (by making these provisions illegal in the contract between retailer and credit card company). In practice very few businesses do so, with the exception of some small businesses that have maybe $5 or $10 minimums. There does seem to be a lot of complicated maneuvering by retailers with regards to the fees - the change actually gives the retailers more negotiating power than before as they now have a stronger bargaining chip to use when negotiating swipe fees "Oh, Visa, you want to charge me 1% of the transaction amount when Mastercard only charges 0.5%? Well how about I impose a surcharge on Visa customers only and see how they like it?" It seems like retailers are making a stink about it since this isn't their first preferred outcome where there is a ruling, settlement or law where interchange fees are actually capped.
- csense 14y ago
  > another piece of paper that's the only proof you have that this transaction ever took place. This one of the good points of cash. Data mining is just creepy. [1] http://consumerist.com/2012/02/17/target-figures-out-teen-girl-is-pregnant-before-her-father-does-sends-helpful-coupons/ http://consumerist.com/2012/02/17/target-figures-out-teen-gi...

3 points by codegeek 14y ago

Thank God. I almost feel bad using my Visa for small purchases when I know I have cash (I'll sometimes ask the person checking me out which they prefer). > Many big players in the retail industry have been up in arms about the settlement. Stores from the nation's largest retailer down to small businesses have lamented the agreement, claiming that it transferred the wrongdoings of credit card issuers to the consumer...Wal-Mart (WMT, Fortune 500), Macy's (M, Fortune 500), JCPenney (JCP, Fortune 500), Limited Brands (LTD, Fortune 500), Gap Inc (GPS, Fortune 500). and The Neiman Marcus Group were among those who joined the NRF in claiming that "raising consumer prices by adding an 'interchange tax' is no remedy for Visa's and MasterCard's continuing monopoly abuse." Yes, this does add the option to put the credit card company's extortionist fee on the back of the consumer, but from what I can tell it's completely optional for the merchant to do this, so I don't understand these big company's motivations (they can just continue not to charge the customers the fee). Perhaps it's linked to these companies having their own co-branded cards that let them split the fee's difference? Not sure what's going on here. The bottom line is that this is incredibly good news for post-credit card tech companies. As a consumer, I'm going to be presented with three options at checkout: 1. Pay with cash, which means you have to carry the cash and then carry the annoying small pieces of metal you're going to get back with another piece of paper that's the only proof you have that this transaction ever took place. This option sucks, and is the reason why people for so long have opted to... 2. Pay with your credit card, but now you have to pay an extra 2.3% fee that before was getting footed by the business. You also have to carry your card around with you, make sure there's money on it, and be super careful you don't loose it. Which leaves... 3. Pay with your smartphone. This will soon be by far the easiest option (in the case of Square Checkout, all you have to do is tell them your name), and one of the most competitive, which will drive fees down. The customer doesn't have to carry anything extra with them, their money is as secure as their smart phone is, and fees will be minimal and only driven lower with competition. Just brace yourselves for the standards war. I'm just waiting for the day when I can reduce my "keys, wallet, phone" door check to "phone."

ars 14y ago
There hasn't been much competition with credit cards, why do you expect it with smartphones? Do you envision the smartphone being like cash - with no recourse? Or like credit cards where chargebacks are possible? The second option is one thing that increases the fees.
army 14y ago
I think it's unlikely that many retailers are going to pass along the fee via a surcharge. The law in Australia now allows retailers to impose surcharges or minimums for credit cards (by making these provisions illegal in the contract between retailer and credit card company). In practice very few businesses do so, with the exception of some small businesses that have maybe $5 or $10 minimums. There does seem to be a lot of complicated maneuvering by retailers with regards to the fees - the change actually gives the retailers more negotiating power than before as they now have a stronger bargaining chip to use when negotiating swipe fees "Oh, Visa, you want to charge me 1% of the transaction amount when Mastercard only charges 0.5%? Well how about I impose a surcharge on Visa customers only and see how they like it?" It seems like retailers are making a stink about it since this isn't their first preferred outcome where there is a ruling, settlement or law where interchange fees are actually capped.
csense 14y ago
> another piece of paper that's the only proof you have that this transaction ever took place. This one of the good points of cash. Data mining is just creepy. [1] http://consumerist.com/2012/02/17/target-figures-out-teen-girl-is-pregnant-before-her-father-does-sends-helpful-coupons/ http://consumerist.com/2012/02/17/target-figures-out-teen-gi...