Visa, Mastercard Mull Increasing Fees for Processing Transactions

Megalith

Megalith

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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.
 
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.
 
Amorius said:
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.
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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.
 
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.
 
Tsumi said:
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.
Click to expand...
Can confirm.
 
Gotta pay for all those points your getting. That means the prices on the items go up. No so free now, are they?
 
bigdogchris said:
Gotta pay for all those points your getting. That means the prices on the items go up. No so free now, are they?
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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."
 
Muahahahahahahahahahaha

just as we get the lightning network really running

and then... I WILL RULE THE WORLD!!!
 
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.
 
Nenu said:
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.
Click to expand...

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?
 
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.
 
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.
 
HockeyJon said:
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?
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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.

Lakados said:
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.
Click to expand...

And you know those merchant banks are going to pass the fees right down to the merchants.
 
HockeyJon said:
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?
Click to expand...
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.
 
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
 
Probably explains why I'm starting to see more "cash only" restaurants around.
 
the need, the feed, the deed, the greed, the speed, the weed, the leed, the treed.....

'nuff said :D
 
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
 
dgz said:
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
Click to expand...
Debit cards are via Visa as well btw...

Tsumi said:
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.
Click to expand...
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
 
Maybe this will spur 3rd party epayment systems like Apple Pay / Samsung Pay and Google Pay?
 
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