Originally Posted by gsilliman

The card processors charge a 2-part fee per transaction. For points/miles cards like everyone here typically uses, the fees for a restaurant are something like $0.35 plus 2.4% of the bill. FYI the restaurant pays the fees on the tax and the tip, too.

That fixed part of the transaction fee can make small tabs very expensive to process. My guess is that is why merchants will try and keep a guest on one tab for the evening. go ahead, get mad at them.

FYI processing fees vary around the world; U.S. merchants pay some of the highest fees in the world.

Visa/MC finally introduced a special "small ticket" fee schedule, supposedly when they were pursuing their first big fast food accounts. The per-transaction fee is $0.10 or even $0.04, but the percentage fee is significantly higher. My impression is that most card-accepting establishments have no idea there are different fees for small transactions.

regarding problems swiping an AMEX card: Yes, they cost about a percentage point more than other cards. Their cards also "fail" the swipe more than others. Try putting the card in a plastic supermarket bag, and then swipe the card and bag together -- not sure why, but it seems to work. FYI if a merchant cannot swipe a card and punches in the numbers manually, the merchant pays much nore.

Also, Amex pays about a day faster than visa/mc. I think it's because they have better technology, because all processors tell us they release funds on the same timetable.