Credit Card Fees passed through from merchant

[Anonymous]

Anonymous wrote:

Anonymous wrote:I thought in some countries, like Iceland, the fees for credit card use are actually lower.

The rest of the world has a functioning banking system so you can just transfer money instantly from your bank account without using any third party like zelle.

I worked for a huge foreign European Bank and when they Launched in the USA they did not offer Checks or Credit Cards. They are not as popular in their home country. People use Debit Cards or money transfer.

This may shock people but in England and Ireland the word Revolut is a verb.

[Anonymous]

Anonymous wrote:I get that the merchant faces processing fees and prefers a check. When I can, I write a check. I still have checks.
But how do they justify charging as a PERCENT? It should be a flat transaction fee! So the more I spend, the more it costs them to process my credit card? We tried to buy online tickets for a charity gala, and of course they don't want credit card fees to offset their fundraising, but as we clicked up to "platinum table tickets" or whatever, the fees for the tickets went up to like $250! Guess who didn't buy charity tickets.

Because the merchant typically pays a "percentage fee". Quite simple--they are passing the added costs onto the user/consumer

[Anonymous]

Anonymous wrote:I hate it too.
My kids school charges 3% for using a credit OR debit card for everything. It’s free if we use bank account.

Why would you expect a university to eat the costs of paying with Credit cards? At $30-40K per semester times 10-20K students?!?!!? Pay with your bank account directly or you can pay the fee. Otherwise tuition and R&B prices will go up for everyone (no thank you)

[Anonymous]

Anonymous wrote:

Anonymous wrote:American Express Credit cards are 3.03% + $0.10 per transaction.

Visa and Master Card like 1.5% to 2.% on average. Plus a transaction fee

All colleges my kids attended passed on full cost if you wanted to use a credit Card. My kids school is costing me $60,000 this Fall. If I swipe with Amex that is a a $1,800.10 charge to college and Visa is $1,200.10 charge to college.

Why people want ACH, Debit, Check, Cash, Zelle for payment

I think rewards cards charge a higher percentage too.

They do- there are a range of fees, depending on merchant type, card type, whether it's done in person or "card not present", etc. There are also lower fees for merchants who run higher volumes. The charts start on page 9 of this PDF.

https://usa.visa.com/dam/VCOM/download/merchants/visa-usa-interchange-reimbursement-fees.pdf

These are the standard fees, they also negotiate deals with some really large merchants. Costco when they switched from Amex to Citibank, because their credit card use base is so affluent on average, they negotiated a deal to be exclusive to Visa cards only, and got their interchange fees down close to zero, basically subsidized by Citibank for getting the deal.

https://optimizedpayments.com/insights/education/costcos-near-zero-interchange-with-visa-and-citigroup/

"Citibank is going to generate revenue from the card being used at other merchants and interest on loan balances."

Again, these business models only make sense in the US where these fees aren't legally capped. It creates a huge amount of revenue/profit for the banks and payment networks to play around with to build their businesses.

[Anonymous]

Anonymous wrote:

Anonymous wrote:

Anonymous wrote:I get that the merchant faces processing fees and prefers a check. When I can, I write a check. I still have checks.
But how do they justify charging as a PERCENT? It should be a flat transaction fee! So the more I spend, the more it costs them to process my credit card? We tried to buy online tickets for a charity gala, and of course they don't want credit card fees to offset their fundraising, but as we clicked up to "platinum table tickets" or whatever, the fees for the tickets went up to like $250! Guess who didn't buy charity tickets.

How can you be someone who is blowing $$$ on a charity gala but not know credit cards charge a percentage from each merchant??

Because it is only very recently that merchants are passing them along to customers.
It defeats the purpose of using credit cards at all.

Charity events have passed the cost on (or at least offered you the option to pay for it) for decades now. Small merchants have always done the same---in past they just offered a discount for cash/check. Large merchants eat the cost, but don't kid yourself, it's already built into the prices and assumed a certain percentage are paying by card.

[Anonymous]

Anonymous wrote:

Anonymous wrote:I hate it too.
My kids school charges 3% for using a credit OR debit card for everything. It’s free if we use bank account.

Why would you expect a university to eat the costs of paying with Credit cards? At $30-40K per semester times 10-20K students?!?!!? Pay with your bank account directly or you can pay the fee. Otherwise tuition and R&B prices will go up for everyone (no thank you)

Their tuition prices aren’t tied to reality and they’ve grown fat by charging absurd out of state fees to from students. I have no pity for them.

[Anonymous]

Anonymous wrote:I get that the merchant faces processing fees and prefers a check. When I can, I write a check. I still have checks.
But how do they justify charging as a PERCENT? It should be a flat transaction fee! So the more I spend, the more it costs them to process my credit card? We tried to buy online tickets for a charity gala, and of course they don't want credit card fees to offset their fundraising, but as we clicked up to "platinum table tickets" or whatever, the fees for the tickets went up to like $250! Guess who didn't buy charity tickets.

Yes.

[Anonymous]

Anonymous wrote:

Anonymous wrote:

Anonymous wrote:I get that the merchant faces processing fees and prefers a check. When I can, I write a check. I still have checks.
But how do they justify charging as a PERCENT? It should be a flat transaction fee! So the more I spend, the more it costs them to process my credit card? We tried to buy online tickets for a charity gala, and of course they don't want credit card fees to offset their fundraising, but as we clicked up to "platinum table tickets" or whatever, the fees for the tickets went up to like $250! Guess who didn't buy charity tickets.

How can you be someone who is blowing $$$ on a charity gala but not know credit cards charge a percentage from each merchant??

Because it is only very recently that merchants are passing them along to customers.
It defeats the purpose of using credit cards at all.

Is to spend money one doesn't have.

Use cash and you will never be in debt.

[Anonymous]

Anonymous wrote:

Anonymous wrote:

Anonymous wrote:

Anonymous wrote:I get that the merchant faces processing fees and prefers a check. When I can, I write a check. I still have checks.
But how do they justify charging as a PERCENT? It should be a flat transaction fee! So the more I spend, the more it costs them to process my credit card? We tried to buy online tickets for a charity gala, and of course they don't want credit card fees to offset their fundraising, but as we clicked up to "platinum table tickets" or whatever, the fees for the tickets went up to like $250! Guess who didn't buy charity tickets.

How can you be someone who is blowing $$$ on a charity gala but not know credit cards charge a percentage from each merchant??

Because it is only very recently that merchants are passing them along to customers.
It defeats the purpose of using credit cards at all.

Is to spend money one doesn't have.

Use cash and you will never be in debt.

A lot of places do not take cash.

[Anonymous]

Anonymous wrote:

Anonymous wrote:

Anonymous wrote:

Anonymous wrote:I get that the merchant faces processing fees and prefers a check. When I can, I write a check. I still have checks.
But how do they justify charging as a PERCENT? It should be a flat transaction fee! So the more I spend, the more it costs them to process my credit card? We tried to buy online tickets for a charity gala, and of course they don't want credit card fees to offset their fundraising, but as we clicked up to "platinum table tickets" or whatever, the fees for the tickets went up to like $250! Guess who didn't buy charity tickets.

How can you be someone who is blowing $$$ on a charity gala but not know credit cards charge a percentage from each merchant??

Because it is only very recently that merchants are passing them along to customers.
It defeats the purpose of using credit cards at all.

Is to spend money one doesn't have.

Use cash and you will never be in debt.

No, the purpose of credit cards is to pay online now.

[Anonymous]

Anonymous wrote:

Anonymous wrote:

Anonymous wrote:I get that the merchant faces processing fees and prefers a check. When I can, I write a check. I still have checks.
But how do they justify charging as a PERCENT? It should be a flat transaction fee! So the more I spend, the more it costs them to process my credit card? We tried to buy online tickets for a charity gala, and of course they don't want credit card fees to offset their fundraising, but as we clicked up to "platinum table tickets" or whatever, the fees for the tickets went up to like $250! Guess who didn't buy charity tickets.

How can you be someone who is blowing $$$ on a charity gala but not know credit cards charge a percentage from each merchant??

Because it is only very recently that merchants are passing them along to customers.
It defeats the purpose of using credit cards at all.

There was a cash and credit price differential for gas for decades.

[Anonymous]

Anonymous wrote:

Anonymous wrote:

Anonymous wrote:Credit card fees for vendors usually include a flat fee and a percentage of the sale.

This. They are only passing on the fee that they pay. Your issue is with the credit card companies, not the vendor.

NP here. But this used to be considered the standard part of doing business as an accounting/admin fee and was not passed on to the customer. The only vendor that did this when I was growing up was the gas station (separate price for cash vs credit). I saw very few vendors doing this precovid (usually very small businesses), but since Covid it has become standard to charge the consumer.

Now there are charges for wire transfers or electronic checks which is insane. I did a recent 6 figure kitchen renovation, and the design/build company wanted 3% for credit card or 2% for wire transfer so I pay every single bill with an old school check. They initially gave me heat over it so I threatened not to sign the contract.

I recently paid for my kid’s travel sport with a check after that club started tacking on this 3% fee with a disclosure in tiny writing that it was for credit card, data security and other admin charges. I refused to pay it. Was like those restaurant fees in DC.

Few vendors did it because the rules of the CC were that they couldn’t charge less for cash. I think only under the radar gas stations managed that.

It was struck down about a decade ago as illegal.

[Anonymous]

Anonymous wrote:

Anonymous wrote:

Anonymous wrote:Credit card fees for vendors usually include a flat fee and a percentage of the sale.

This. They are only passing on the fee that they pay. Your issue is with the credit card companies, not the vendor.

NP here. But this used to be considered the standard part of doing business as an accounting/admin fee and was not passed on to the customer. The only vendor that did this when I was growing up was the gas station (separate price for cash vs credit). I saw very few vendors doing this precovid (usually very small businesses), but since Covid it has become standard to charge the consumer.

Now there are charges for wire transfers or electronic checks which is insane. I did a recent 6 figure kitchen renovation, and the design/build company wanted 3% for credit card or 2% for wire transfer so I pay every single bill with an old school check. They initially gave me heat over it so I threatened not to sign the contract.

I recently paid for my kid’s travel sport with a check after that club started tacking on this 3% fee with a disclosure in tiny writing that it was for credit card, data security and other admin charges. I refused to pay it. Was like those restaurant fees in DC.

I like the security afforded with a credit card, I want fewer people to have my checking account number, since fraud in banking accounts is a way way bigger pain.

[Anonymous]

Anonymous wrote:I get that the merchant faces processing fees and prefers a check. When I can, I write a check. I still have checks.
But how do they justify charging as a PERCENT? It should be a flat transaction fee! So the more I spend, the more it costs them to process my credit card? We tried to buy online tickets for a charity gala, and of course they don't want credit card fees to offset their fundraising, but as we clicked up to "platinum table tickets" or whatever, the fees for the tickets went up to like $250! Guess who didn't buy charity tickets.

Because they get charged 3% of the charge.

[Anonymous]

And this is why many countries are moving away from credit cards. In China, they pay by QR code (Alipay and WePay). In India, they use UPI. Both are app-based methods of payment that tie to an underlying bank account but also have their own wallet so you don't actually need a bank account. But they also go around the credit card system entirely.