Add your sig to fight swipe fees

"A swipe fee is a fee collected from retailers by the credit card companies and their member banks every time a credit or debit card is used to pay for a purchase. This fee is also known as "interchange." This fee varies with type of card, size of merchant and other factors, but as much as $2 of every $100 you spend on plastic goes to card issuers. Credit and debit card interchange collected by Visa and MasterCard banks totaled about $48 billion in 2008, triple what it was in 2001. These fees raise prices for consumers. In 2008, the average American family paid about $427 in interchange fees."

http://www.fightswipefees.com/

Steve

Are you really that stunned by it? It's not as if Visa, Mastercard, and American Express do the transaction for free- it does take some effort to process the purchase, and then make sure both sides of the transaction get their money/debt.

It's not the banks that run that- it's Visa, MC, and Amex.

Note- having run a small business for a short time- the money is very related toward risk- the fees are a lot smaller when you actually handle the card yourself, but large, companies who do lots of transactions also pay lower fees.

The companies who do this take a risk that payment wont happen or that it's total fraud PLUS they have to actually process the transaction.

If you don't like the fees, use cash or checks.

Eric

My business is international, and the card companies HATE that. I pay a minimum of 3.5%, as much as 5%. Then wait 3-5 days to see the money in my account. Wire transfer charge by my bank (BoA) is 12.00 to recieve, but money is credited immediately. But some banks are very casual about sending transfers out. 5-6 days coming out of Trinidad is standard. From Cayman- two hours.

Those fees are part of the business model. No fees, no plastic. Do you think these companies should print all these plastic cards and maintain the network that handles all of these transactions for free?

How do you think it would work if there was no swipe fee? Do you think Visa would become a charity and just do it for free?

To play devil's advocate it's not as if they aren't collecting interest on most of those transactions so they could afford to drop the swipe fee.

Sometimes the swipe fee is upped to pay a 3rd party for setting up your card account.

That is NOT the problem.

The problem is that those fees cause retailer to raise the prices of items to cover them and people that pay cash pay that higher price when they aren't even using the service of the credit card company.

It's effectively a hidden tax on almost all consumer goods (from the consumers side that is). Use a credit card, you pay extra for a service, use cash, pay extra for no reason.

If you want to start a movement to require lower prices for cash transactions, that would be appropriate. I have heard though that the one of the conditions of the credit card companies is that you cannot allow lower cash prices (although I do see it at gas stations).

aircooled wrote: That is NOT the problem. The problem is that those fees cause retailer to raise the prices of items to cover them and people that pay cash pay that higher price when they aren't even using the service of the credit card company.

Except that they don't arbitrarily raise the price to COMPLETELY cover the swipe fee on every transaction, cash or credit. They figure out the year's expected swipe fees and then spread that out over the entire revenue stream. So if a retailer is paying 2% swipe fees on half his transactions, he ups price 1% over all of the transactions, not 2% over all of them.

I have no problem paying for the convenience of using a credit card by paying a marginally higher price even when I use cash. And for somebody like a gas station where they can process so many more sales by taking cards directly at the pump (thereby saving paid cashier time to make each and every transaction, usually twice), I doubt it has much if any effect on retail prices at all.

This is a stupid idea, IMHO.

Duke wrote: Except that they don't arbitrarily raise the price to COMPLETELY cover the swipe fee on every transaction, cash or credit. They figure out the year's expected swipe fees and then spread that out over the entire revenue stream. So if a retailer is paying 2% swipe fees on half his transactions, he ups price 1% over all of the transactions, not 2% over all of them.

Pretty much this. When you pay for something (with whatever method), part of that payment goes into paying for various things at the retailer that you may/may not have used in that particular transaction. This is simply another one of them.

The fact that you didn't use this particular component this time isn't terribly relevant. For example, I prefer my retailers to have knowledgeable, helpful staff instead of mind-dead drones. That type of staff often costs more money. Should I get a price cut every time I don't need to ask them something? Since on that occasion I didn't make use of them?

Same thing. Processing credit cards costs the retailer money, just like rent, utilities, payroll], insurance, etc. And the retailer passes the cost of doing business on to the customer. How is this any different?

Not my movement, nor am I stunned, just posting a link to a movement that I found the link via the Speedway website.

That said, isn't the ridiculous percentage enough, and that is why i do not own a credit card nor do I accept credit cards in my business.

Here is a sample of average credit card rates. http://www.indexcreditcards.com/credit-card-rates-monitor/

When I got my first and last credit card at the age of 18 there were no fees beyond the interest. I guess that the newish fees mean that all the banks are still being mis-managed. Really, what is the interest rate for? (Pure profit is not an acceptable answer)

aussiesmg wrote: (Pure profit is not an acceptable answer)

Why?

Wait, you're right. In the case of credit cards they shouldn't make money off taking the risk of loaning it to you. Heck they should just give it to me.

At no time did I say make no profit, read the sentence again. They are offsetting their costs with hidden fees and making all the interest profit with no expenses.

I operate a business and expect costs, but 17% interest on millions of $ a day, then they have to tack on the costs.

Maybe I should change businesses, then I could get bail out money after spending more that I make, and get a bonus for doing it.

carguy123 wrote: To play devil's advocate it's not as if they aren't collecting interest on most of those transactions so they could afford to drop the swipe fee. Sometimes the swipe fee is upped to pay a 3rd party for setting up your card account.

No, they are not collecting interest. Well, save American Express- who does not allow third party banks to supply their card.

The bank that issues the card to you gets the interest. Visa and MC are the middle company that uses a standarized process so that you can use your card virtually anywhere in the world.

It's been a few decades since the card was actually JUST visa or back then MasterCharge. (and I think Visa was something else, too- like Bank Americard?)

Why charge? First of all, it's THEIR system you are using, not Capitol One, or whatever bank issued your card. They came up with a secure system that gives money to a merchant, and is funneled from your source bank. If the transaction is fraudulent, their rear is on the line, too.

You are paying for the honor of using their secure payment system. And they get to profit for that secure payment system. Again, this fee is to Visa and Mastercard, not your bank.

Eric

aussiesmg wrote: At no time did I say make no profit, read the sentence again. They are offsetting their costs with hidden fees and making all the interest profit with no expenses. I operate a business and expect costs, but 17% interest on millions of $ a day, then they have to tack on the costs. Maybe I should change businesses, then I could get bail out money after spending more that I make, and get a bonus for doing it.

17% interest... and that's reserved for people who are high risk of not paying off their balances. Just like any other loan: walk into a car dealer or try to get a mortgage with bad numbers and guess what? High interest rates. They need to pay for the risk associated with lending people money, and make profit beyond. How many people at 17% default on their balances and weasel out of paying it? It doesn't take many of those to offset any profits from the people who DO pay interest.

I move $30-$40,000 a year through my credit card and I haven't carried a balance in a decade or more. I pay ZERO in annual fees and ZERO interest because I pay my balance in full every month. My interest rate is about 5.5% fixed (in case I ever decide to spread out a large purchase a little) AND I get a 1.5% cash rebate on all purchases... because I'm an extremely minimal risk for my credit card company.

Business for profit is not evil. They could always just not provide a credit card service, and then where would we be? I'm very happy paying the costs for the convenience of a credit card.

aussiesmg wrote: I guess that the newish fees mean that all the banks are still being mis-managed. Really, what is the interest rate for? (Pure profit is not an acceptable answer)

Not sure where you got the impression that they are newish fees. When Chargex showed up, I was about 8 years old. I'm 50 this year. I remember a discussion around the dinner table about the family friend my mom bought her clothes from, and how she had to pay to accept a credit card at her store.

Also- I could charge you less if I turned the furnace off at the shop. I might freeze to death.....

I'll add my Sig. It speaks louder than words

I can't believe I posted something defending banks and credit card companies. I paid something on the high side of 6 grand in interest and service fees last year......

I'm curious how many of the 'banks are evil and take all our money" people ever ran a business. In two that I managed I dealt with banks a bit and have never had a real problem. I understood they were trying to make a buck like ?I was and anytime I didn't understand what I was being charged it was explained. most bankers went so far as to teach us how we could do things better to minimze what we were being charged. I got in to a habit of reading and asking questions before signing anything and if you do you find out that there are no surprises.

Well, in socialism no one makes a profit. IT's all done for the good of the people. Don't worry... it won't be long.

just get a credit card that gives you % back.. My amex pays me to use that card. I got $800 back last year. I pay it off every month and make money by utilizing their services.

If you don't do it, you're leaving money on the table...

so if this "In 2008, the average American family paid about $427 in interchange fees. " Is true.. I still make $400.. ha ha I win because I'm a fiscally responsible liberal.

Bobzilla wrote: Well, in socialism no one makes a profit. IT's all done for the good of the people. Don't worry... it won't be long.

dear bob...

I think you've confused Socialism and Communism... Nice try

Maybe you should listen to more Glenn Beck.

ignorant wrote: just get a credit card that gives you % back.. My amex pays me to use that card. I got $800 back last year. I pay it off every month and make money by utilizing their services. If you don't do it, you're leaving money on the table...

That's a good point too. Look at different agreements and see where you will get something back. My AAA membership easily pays for itself three to four times over.

aussiesmg wrote: They are offsetting their costs with hidden fees and making all the interest profit with no expenses. I operate a business and expect costs, but 17% interest on millions of $ a day, then they have to tack on the costs.

No expenses? How'd you come up with that notion? There's a lot of expense to running a business, and credit card companies are a business.

Hidden fees? It's real well advertised to the businesses that chose to use them. It's not hidden at all.

17% interest? You've mixed up the cost to the card holder who has a revolving credit balance with the % fee to a business per transaction. The transaction cost is split between the flat fee or swipe fee, and the % of the total transaction.