Originally Posted by
Points Scrounger
Ran across this at an Induan buffet lunch this past weekend seeing $.43 on bill as Surcharge (3.5%). Owner kept going on and on about it being "legal" now, following up with, "You will see many restaurants doing it!"
Did it cost that restaurant 3.5% to run your card? Would they have removed the surcharge had you used a debit card instead? If one of those wasn't going to be true, they're not following the surcharge rules.
Originally Posted by
rasheed
There are so many ways to look at this issue's progress. One is the dramatic increase of takeaway/online orders is leading to a significant increase in payment via app or online (this triggers the CNP provision which are the most expensive credit card fees possible). We already do see many online restaurant portals charging extra for menu items and so forth. There really isn't a viable online debit network in the US that isn't owned by Visa/MC these days. Many other countries have these options which work well for online purchases of these type without having a significant increase in the fees.
Given that Durbin caps major issuer debit card surcharge at 0.05% regardless of how the card's run, it's not going to be as big of an impact as you're thinking.
Also,
it is possible to route debit cards over non-Visa/MC for card not present transactions. Amazon, for instance, has done it for a while.
Originally Posted by
rasheed
I am still pondering on what happened to all of these credit card benefits that essentially disappeared overnight (extended warranty, price protection, travel benefits, etc.). One could argue that credit card issuers are always trying to increase their profits. But they have also been doing that via higher interest rates (or more spread between key published rates and what they charge on cards), other fees, etc. I do believe MC and Visa were helping issuers negotiate these insurance policies historically. I actually am now thinking that the decision to remove these benefits is in part of preparation to some sort of new discount fee showdown with merchants still to come.
It was also traditionally a lot more difficult to take advantage of those benefits. Thanks to social media and online shopping, that's not really the case anymore--meaning that those benefits could very well be money losers for them even if interchange were guaranteed to always be at the same levels.
Originally Posted by
rasheed
If these surcharges become more prevalent, the fastest way would be for Visa/MC to cut rates dramatically (remember surcharges must be based on what is paid). I think that could stop the surcharge issue pretty quickly.
A lot of other places didn't see significant reductions in interchange until the government took action. If (and that's a pretty big if) surcharges become more common, the credit card networks will only reduce them the minimum amount necessary--and probably only for a subset of merchants.