Originally Posted by
foothills county flier
I didn't say AC got any $$ from Moneris. They get the a fees from the credit card companies on all transaction made on the branded card. I'm guessing you have never had a CC merchant account. .75% fee would be an amazing rate. A good rate for Visa/MC would be 2%, most run around 2.5% or higher for a reg card. and premium cards can comes with a merchant fee in the 3.5% to 4% range. Amex usually starts over 3%. Anyone can see what AC mades off their branded CC, it posted in their year end.
I think you need to re-read my post regarding what I posted about how Moneris works regarding rates. But it's irrelevant really, the main point being that I agree AC does not get any money from Moneris, and therefore your uncle at Moneris doesn't have any idea what AC makes as a percentage (if any) of card transactions.
Air Canada listing 1.5B in revenue (not profit, they are two different things) in their annual report as coming from Aeroplan does not in any way imply they earn a 0.75% cut of every credit card transaction made with an AC card, which is what you are claiming. It doesn't even imply they make a profit from their loyalty program, as we have no insight into the costs of operating the program, as Adam Smith explained.
Originally Posted by
The Macker
I believe Air Canaa/Aeroplan sets a price for purchasing their points as well any other Air Canada service they are purchasing. All of the perks which Air Canada needs to provide to the card holders is wrapped up into the fee for points and additional services. So things like Lounge Access will come with tha $ cost to the credit card companies.
I recall this was part of the $ which Visa and Mastercard paid in advance when Air Canada bought back the Aeroplan program a number of years ago. It was Hundreds of Million of $ which the credit card companies paid to Air Canada to help finance the repurchase of their program.
I don't think any detailed information on this has ever been released to the public. I would love to know more about how the relationship works, but I don't think it's reasonable for us to expect any of that information to be publicly available.
I think it's reasonable to expect that the bulk of AC's revenue from the co-branded cards is in the form of the banks buying AP points in bulk from them.