5 ms·

So his argument is that it cost 0.5% to 1.5% of the GDP to have cash money... I believe the current visa processing fee is 1.51% plus $0.10

by debrice 12y ago

fennecfoxen 12y ago
I believe most PIN-based payment systems end up being a lot cheaper than that, and since this is MasterCard we're talking about, maybe you should look at a network like Maestro (which is big in the EU). Unfortunately it's really hard to pin down exact rates with a casual Google search...
- xxs 12y ago
  In Europe bank card retail purchases and most debit card withdrawals (some exceptions) are free.
  - spurgu 12y ago
    Free for the end consumer yes, but the retailer probably pays some kind of fee?
    - xxs 12y ago
      Yes, flat monthly fee.
      - ksec 12y ago
        Wow, could you share what sort of price range is that? I never knew the debit cards transaction were free payment process.
        msh 12y ago
        In Denmark the charge for a debit card is 0.20 usd plus 0,1% of the transaction for purchases above approximately 18 usd. It's is a smaller fixed amount for smaller purchases.
      - brazzy 12y ago
        Nope. At least in Germany, it's 0.3% and a minimum of 8 cents per transaction, plus the monthly infrastructure fee.
        raverbashing 12y ago
        This is for EC?
        brazzy 12y ago
        Yes
        needusername 12y ago
        I believe the new credit interchange for EU is similar.
opendais 12y ago
Well that his solution to the problem, isn't it? ;) He wants that .5% to 1.5% to go to him instead!
ksec 12y ago
Doesn't that depends on countries? Last time i heard the US credit card payment system was some ridiculously expensive rate at 2 - 3%.
- fennecfoxen 12y ago
  The US rate for credit card (and check card) processing is indeed very high! The upside of this is that it makes a variety of financial firms (banks and credit card companies) quite interested in issuing them. For instance, some banks will offer no-fee bank accounts with direct deposit and a certain minimum number of monthly check-card purchases (in lieu of requiring larger minimum balances). Some providers will also explicitly send a significant fraction of these fees right back to the customer as "cash back", airline-miles, or similar rewards. (The downside is obvious. The dynamics of the interplay are interesting. I wonder if there are any good studies.)
- bediger4000 12y ago
  You actually negotiate the interchange fee somewhere along the process of getting a merchant account. If you're a "Level 1" merchant you pay less and smaller merchants pay more, American Express and Discover charge more, if you're in a dodgy business coughPORNcough you pay quite a bit more. I think that Visa or MasterCard will increase your interchange fee if your customers do too many chargebacks and disputes, too. I'm out of touch with that any more, but 1.75% used to be a very good interchange rate maybe 10 years ago.
- deleted 12y ago
  [deleted]
needusername 12y ago
Interchange is all over the place. It can easily go to 2.5%. http://www.mastercard.com/us/company/en/whatwedo/interchange/Country.html http://www.mastercard.com/us/company/en/whatwedo/interchange... http://www.mastercard.com/us/company/en/whatwedo/interchange.html http://www.mastercard.com/us/company/en/whatwedo/interchange... http://www.mastercard.us/merchants/support/interchange-rates.html http://www.mastercard.us/merchants/support/interchange-rates... http://www.osc.nc.gov/secp/schedulec-visaandmastercardiqda.pdf http://www.osc.nc.gov/secp/schedulec-visaandmastercardiqda.p... The rules are very complicated and arbitrary. To give you an example: cashback interchange in Poland is negative (acquirer get money from the issuer), intradomain interchange is positive (issuer gets money from the acquirer) and interdomain interchange is zero. There is no way explain interchange without using the words yacht, golf course, hookers and cocaine.

So his argument is that it cost 0.5% to 1.5% of the GDP to have cash money... I believe the current visa processing fee is 1.51% plus $0.10

by debrice 12y ago

So his argument is that it cost 0.5% to 1.5% of the GDP to have cash money... I believe the current visa processing fee is 1.51% plus $0.10

fennecfoxen 12y ago

I believe most PIN-based payment systems end up being a lot cheaper than that, and since this is MasterCard we're talking about, maybe you should look at a network like Maestro (which is big in the EU). Unfortunately it's really hard to pin down exact rates with a casual Google search...

xxs 12y ago
In Europe bank card retail purchases and most debit card withdrawals (some exceptions) are free.
- spurgu 12y ago
  Free for the end consumer yes, but the retailer probably pays some kind of fee?
  - xxs 12y ago
    Yes, flat monthly fee.
    - ksec 12y ago
      Wow, could you share what sort of price range is that? I never knew the debit cards transaction were free payment process.
      - msh 12y ago
        In Denmark the charge for a debit card is 0.20 usd plus 0,1% of the transaction for purchases above approximately 18 usd. It's is a smaller fixed amount for smaller purchases.
    - brazzy 12y ago
      Nope. At least in Germany, it's 0.3% and a minimum of 8 cents per transaction, plus the monthly infrastructure fee.
      - raverbashing 12y ago
        This is for EC?
        brazzy 12y ago
        Yes
        needusername 12y ago
        I believe the new credit interchange for EU is similar.

opendais 12y ago

Well that his solution to the problem, isn't it? ;) He wants that .5% to 1.5% to go to him instead!

ksec 12y ago

Doesn't that depends on countries? Last time i heard the US credit card payment system was some ridiculously expensive rate at 2 - 3%.

fennecfoxen 12y ago
The US rate for credit card (and check card) processing is indeed very high! The upside of this is that it makes a variety of financial firms (banks and credit card companies) quite interested in issuing them. For instance, some banks will offer no-fee bank accounts with direct deposit and a certain minimum number of monthly check-card purchases (in lieu of requiring larger minimum balances). Some providers will also explicitly send a significant fraction of these fees right back to the customer as "cash back", airline-miles, or similar rewards. (The downside is obvious. The dynamics of the interplay are interesting. I wonder if there are any good studies.)
bediger4000 12y ago
You actually negotiate the interchange fee somewhere along the process of getting a merchant account. If you're a "Level 1" merchant you pay less and smaller merchants pay more, American Express and Discover charge more, if you're in a dodgy business coughPORNcough you pay quite a bit more. I think that Visa or MasterCard will increase your interchange fee if your customers do too many chargebacks and disputes, too. I'm out of touch with that any more, but 1.75% used to be a very good interchange rate maybe 10 years ago.
deleted 12y ago
[deleted]

needusername 12y ago

Interchange is all over the place. It can easily go to 2.5%. http://www.mastercard.com/us/company/en/whatwedo/interchange/Country.html http://www.mastercard.com/us/company/en/whatwedo/interchange... http://www.mastercard.com/us/company/en/whatwedo/interchange.html http://www.mastercard.com/us/company/en/whatwedo/interchange... http://www.mastercard.us/merchants/support/interchange-rates.html http://www.mastercard.us/merchants/support/interchange-rates... http://www.osc.nc.gov/secp/schedulec-visaandmastercardiqda.pdf http://www.osc.nc.gov/secp/schedulec-visaandmastercardiqda.p... The rules are very complicated and arbitrary. To give you an example: cashback interchange in Poland is negative (acquirer get money from the issuer), intradomain interchange is positive (issuer gets money from the acquirer) and interdomain interchange is zero. There is no way explain interchange without using the words yacht, golf course, hookers and cocaine.