4 ms·

I've wondered this for a while – could it simply be competition? Nobody wants to drop below that mark?

• crisnoble 13y ago
  Wouldn't dropping below the mark let you beat the pants off the competition?
  • NegativeK 13y ago
    Not if costs are prohibitive.
  • blueblob 13y ago
    Depends on what margin of this is profit. If they're not making money through nonpayment then they would be losing money each transaction.
• abruzzi 13y ago
  Of course it can drop below that mark, but that is usually a negotiation between a vendor and the payment processor. If you are small and unlikely to drive much business, you will have a hard time getting a lower number. Where I work, we get 2.3% and do several million dollars a year in transactions. We are also a government institution, so it's likely that the processor sees us as a lower risk (though most of the risk comes from the card holder) hence we get the lower rate. I'd bet that WalMart pays significantly lower fees due to volume.
• michaelt 13y ago
  Presumably on a Visa transaction the payment provider takes a cut and Visa takes a cut. There's competition between payment providers to keep their cut down, but you can't charge Visa cards without Visa's help, meaning there's no competition on their cut. Unless a merchant is bold/foolhardy enough to decline Visa. In the UK a lot of stores don't accept American Express due to their higher processing fees [1]. [1] http://www.theguardian.com/money/2009/nov/29/american-express-charge-retailers http://www.theguardian.com/money/2009/nov/29/american-expres...