Visa, Mastercard Mull Increasing Fees for Processing Transactions

Megalith

24-bit/48kHz
Staff member
Joined
Aug 20, 2006
Messages
13,003
More, more, more: The Wall Street Journal has learned that card-network giants Visa and Mastercard plan to increase both “interchange” and processing fees (alternate source sans paywall), which is bad news for both merchants and consumers. The former is what merchants pay banks for the privilege of running credit cards, which is typically offset by increasing the pricing of goods and services. Naturally, an increase on one end will prompt another.

Merchants often increase the prices consumers pay following such fee increases, in an attempt to protect their own profits. Roughly 1% to 2.5% of prices for goods and services go to cover card fees, according to people familiar with merchant pricing. Consumers often pay for those fees whether they pay with cash or card. While big in the aggregate—merchants pay tens of billions of dollars in card fees annually—per-transaction changes are often minuscule and so go largely unnoticed by consumers.
 

Amorius

n00b
Joined
May 10, 2014
Messages
15
Well, if they want more money, fine - improve the service. Give incentives to merchants to upgrade card readers to chip readers. I, as a consumer, want a card that has a chip that is linked to my mobile bank's app that approves every damn purchase. Alternatively, it should approve online purchases too. For them to ask for more and not provide a better service to those impacted is absolute shite.
 

Tsumi

[H]F Junkie
Joined
Mar 18, 2010
Messages
13,497
Well, if they want more money, fine - improve the service. Give incentives to merchants to upgrade card readers to chip readers. I, as a consumer, want a card that has a chip that is linked to my mobile bank's app that approves every damn purchase. Alternatively, it should approve online purchases too. For them to ask for more and not provide a better service to those impacted is absolute shite.

Us merchants are getting strong-armed into accepting chip readers rather than being incentivized to. They do this by not covering any fraudulent claims made with a swiped credit card.
 

Nenu

[H]ardened
Joined
Apr 28, 2007
Messages
19,832
This seems fraudulent.
What do they need the extra capital for?
More and more sales use cards, its not like they are losing out in any way, quite the opposite.
Yet they provide no extra benefit and because they are a monopoly we have no choice but to comply.
I suggest their conduct needs further regulation.
 

Joust

Supreme [H]ardness
Joined
Nov 30, 2017
Messages
4,833
Us merchants are getting strong-armed into accepting chip readers rather than being incentivized to. They do this by not covering any fraudulent claims made with a swiped credit card.
Can confirm.
 

bigdogchris

Fully [H]
Joined
Feb 19, 2008
Messages
18,389
Gotta pay for all those points your getting. That means the prices on the items go up. No so free now, are they?
 

Tsumi

[H]F Junkie
Joined
Mar 18, 2010
Messages
13,497
Gotta pay for all those points your getting. That means the prices on the items go up. No so free now, are they?

Problem is the average idiot consumer will never realize this unless there is an actual visible fee for credit card use. Credit card companies will do whatever they can to prevent merchants from charging such a fee. That's why at our gas station, we have to word our cash price as a "cash discount" rather than "credit card fee."
 

jojo69

[H]F Junkie
Joined
Sep 13, 2009
Messages
10,853
Muahahahahahahahahahaha

just as we get the lightning network really running

and then... I WILL RULE THE WORLD!!!
 

steakman1971

2[H]4U
Joined
Nov 22, 2005
Messages
2,433
I wonder if we will see more solutions like Walmart and recently Kroger introduced. From my understanding (which might be wrong), your account is tied to your checking. When you use the mobile app to pay, it generates a QR code that gets scanned by their software and comes out of your checking. There systems are not using any credit card companies.
 

HockeyJon

[H]ard|Gawd
Joined
Dec 14, 2014
Messages
1,476
This seems fraudulent.
What do they need the extra capital for?
More and more sales use cards, its not like they are losing out in any way, quite the opposite.
Yet they provide no extra benefit and because they are a monopoly we have no choice but to comply.
I suggest their conduct needs further regulation.

Clearly you have no idea how corporations work. The “extra capital” is for raising profits, which is the reason these companies exist; to make money. That’s it. They don’t owe anyone anything. It’s a service, they charge a fee for service. Don’t like it, don’t accept the card. A lot of stores don’t accept Amex for this reason. Why the eff would the government have to get involved?
 

Lakados

Supreme [H]ardness
Joined
Feb 3, 2014
Messages
4,383
So reading into the release they are not raising the fee on Merchants but on Merchant banks instead. Merchant banks are financial institutions that maintain accounts for sellers such as Amazon and Costco. JPMorgan, Citigroup and Bank of America are some of the top merchant banks in the country. They are only raising the rates in the US supposedly because the Merchant Banks have not been upgrading their security and practices as other countries have and are responsible for a disproportionately large number of the fraud claims.
 

StormNobleheart

Limp Gawd
Joined
Apr 12, 2017
Messages
134
This news does not surprise me one bit. The fees for all of them have gotten expensive. American Express is the worst of them with the others playing catch-up in that regard. The merchant services to accept credit cards has gotten quite ridiculous as well with their hidden fees and exceptionally poor customer service. If so many customers did not use credit cards only, we would likely take cash and debit cards only to avoid the fees, and hassles.
 

Tsumi

[H]F Junkie
Joined
Mar 18, 2010
Messages
13,497
Clearly you have no idea how corporations work. The “extra capital” is for raising profits, which is the reason these companies exist; to make money. That’s it. They don’t owe anyone anything. It’s a service, they charge a fee for service. Don’t like it, don’t accept the card. A lot of stores don’t accept Amex for this reason. Why the eff would the government have to get involved?

Because credit card companies use shady tactics and dealings to make it such that merchants cannot charge consumers directly for the processing fee, which hides the fee from consumers. This is one case that this system needs to be regulated.

So reading into the release they are not raising the fee on Merchants but on Merchant banks instead. Merchant banks are financial institutions that maintain accounts for sellers such as Amazon and Costco. JPMorgan, Citigroup and Bank of America are some of the top merchant banks in the country. They are only raising the rates in the US supposedly because the Merchant Banks have not been upgrading their security and practices as other countries have and are responsible for a disproportionately large number of the fraud claims.

And you know those merchant banks are going to pass the fees right down to the merchants.
 

Nenu

[H]ardened
Joined
Apr 28, 2007
Messages
19,832
Clearly you have no idea how corporations work. The “extra capital” is for raising profits, which is the reason these companies exist; to make money. That’s it. They don’t owe anyone anything. It’s a service, they charge a fee for service. Don’t like it, don’t accept the card. A lot of stores don’t accept Amex for this reason. Why the eff would the government have to get involved?
You missed the point.
When they are so closely tied to the core of the economy and they have a monopoly, their profit should be limited.
And as pointed out this appears to involve collusion.
 

MrDeaf

Limp Gawd
Joined
Jun 9, 2017
Messages
428
I thought Amex already charged 4 or 5%, where as Visa and MC only charged 3%
This also happens to be why a lot of smaller stores don't accept Amex
 

Wrecked Em

Supreme [H]ardness
Joined
Sep 14, 2004
Messages
7,216
Probably explains why I'm starting to see more "cash only" restaurants around.
 

bonehead123

[H]ard|Gawd
Joined
Nov 27, 2011
Messages
1,278
the need, the feed, the deed, the greed, the speed, the weed, the leed, the treed.....

'nuff said :D
 

dgz

Supreme [H]ardness
Joined
Feb 15, 2010
Messages
5,838
I still think credit cards are among the stupidest things ever. Up there with leaf blowers. Makes no sense but it's wildly used for some reason
 

naib

[H]ard|Gawd
Joined
Jul 26, 2013
Messages
1,289
I still think credit cards are among the stupidest things ever. Up there with leaf blowers. Makes no sense but it's wildly used for some reason
Debit cards are via Visa as well btw...

Us merchants are getting strong-armed into accepting chip readers rather than being incentivized to. They do this by not covering any fraudulent claims made with a swiped credit card.
And why should they cover fraud? tech exists that drives down fraud.


On an aside... all this will do is drive inflation as this will be passed onto the consumers
 

dvsman

2[H]4U
Joined
Dec 2, 2009
Messages
3,543
Maybe this will spur 3rd party epayment systems like Apple Pay / Samsung Pay and Google Pay?
 
Top