Originally Posted by
Lobachevsky
Those fees are the maximum fees that can be charged. We have no idea what WM actually pays to process an unregulated debit card, and we have no idea of the arrangements Simon.com has made either.
Plus, please explain to me how Simon/Blackhawk/Metabank make money by paying fees to process the charge cards used to buy the debit cards. A fee is not a profit item--it's a cost. If fees are paid TO Simon/Blackhawk/Metabank by those who distribute their cards, that's different.
My point is that Walmart is PAYING fees to Blackhawk/Metabank when you liquidate the card. This is how the system works:
Simon pays less than 100% of face value to buy the cards from Blackhawk/Metabank. They make money on that spread + $3.95 card fee, their expenses are the swipe/interchange fees they pay to our credit cards.
When you use a VGC, the merchant (in most cases Walmart or w/e your liquidation outlet is) pay swipe/interchange fees to Blackhawk/Metabank on that transaction.
It's not rocket science to figure out how who's paying the bills here. Simon is embracing "loyalty gamers" because they, and those above them on the chain, are making money. The end merchants are the losers here. Money services are offered by stores as a loss leader to get people in the door, but we are not their target customers. They are taking losses on these services in hopes that the unbanked then spend their entire paycheck on other crap in the store.