Why many business owners would love it if you stopped using your credit card

https://www.npr.org/2023/09/26/1201257895/credit-card-fees-visa-mastercard-retailers

by pseudolus • 3 years ago

5 5 3 years ago

valvar• 3 years ago

I imagine handling cash probably has hidden costs that are comparable to the swipe fees, though.

bcx5k15• 3 years ago

It does. Here in the UK at least, it's usually a lot cheaper to take cards than to pay transport (this is a real pain) and deposit fees (the latter is 2% on top of a fixed monthly fee, for my business account) so its usually only tax dodgers that go cash only

I think in the US merchant fees for card transactions are much higher though so may be a different ball game over there.

arethuza• 3 years ago

I thought that was really clever when the supermarkets started offering cashbacks - customers get a means of getting cash easily and they reduce the amount of cash they have to transport and deposit.

Mind you - haven't used that for years and I think most supermarkets have stopped offering it.

Arnt• 3 years ago

"x costs three times as much as y" is a kind of comparison ;)

(The factor of three is real, but perhaps that business had unusually bad contracts with the credit card companies. I wouldn't know.)

nness• 3 years ago

Australia allows the company to pass on credit card fees direct to the customer — if you can be bothered calculating it.

For a while, small coffee shops and the like added around a 20 cent fee for card purchases when tap-and-go payments (paywave, contactless, etc.) became popular. Then the regulator ruled you can only charge the exact fee — on a $3.20 flat white that fee is roughly 6 cents — so they stopped because it was overly burdensome at the point-of-sale to calculate this fee for each card type. Plus the margin on a flat white is so high...

On the other hand, airlines also included the credit card fee (and some still do,) but would instead let you pay via bank transfer. On such small margin, this would have been quite a saving for the consumer and the airline. I find this still exists in wholesale suppliers — that 2%~ fee on a Mastercard hits when you are buying a few thousand of inventory.

As a small business owner, I find credit card charges are just a "cost of doing business." Shopify fees are way more prohibitive, for instance.

Why many business owners would love it if you stopped using your credit card

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