USA Merchants Reach Credit Card Surcharge Rights Agreement [Effective 1.27.2013]
#466
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I could see some merchants dropping card support - particularly small salons and restaurants if chip and PIN was mandated by legislation.
I don't see an issue with adding 4 additional card network competitors. Banks might win as well since they'll get sweeter offers to support cards from eight different networks.
#467
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I know it used to carpet-bomb my mailbox with cashback offers that were always quite weak. If they actually had better cards, I wasn't targeted for them. Typical Visa/MC cashback options beat it, if that's the target audience. (e.g., the non-travel-points audience)
#468
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For those who don't like to play the credit card game and want a quality checking account (with a 1% cash back debit card) to attach to a decent savings account (2.10% rate), or CD, then that's the bank/network for them.
I would say Discover is way more competitive than they used to be.
#469
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Adopting chip and PIN isn't really a price control, which is what I'm arguing against.
I could see some merchants dropping card support - particularly small salons and restaurants if chip and PIN was mandated by legislation.
I don't see an issue with adding 4 additional card network competitors. Banks might win as well since they'll get sweeter offers to support cards from eight different networks.
I could see some merchants dropping card support - particularly small salons and restaurants if chip and PIN was mandated by legislation.
I don't see an issue with adding 4 additional card network competitors. Banks might win as well since they'll get sweeter offers to support cards from eight different networks.
Anyway, my point was that four additional credit networks may not be viable in the US, at least not with acceptance anywhere close to as good as Visa/MC. Especially if said networks have to offer interchange rates even higher than the current four to get issuers to sign on in the first place (since merchants are already balking at the current rates). To be honest, I'm surprised the US isn't more of a cash based society, though I guess decades of conditioning the public to not use it helps.
#470
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Anyway, my point was that four additional credit networks may not be viable in the US, at least not with acceptance anywhere close to as good as Visa/MC.....
#471
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Plus, it's possible that those other four will end up going under or consolidating anyway, bringing us back to where we started.
#472
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Your previous comment implied that when government gets involved in anything, prices go up--not when government tries to cap the price of something.
Anyway, my point was that four additional credit networks may not be viable in the US, at least not with acceptance anywhere close to as good as Visa/MC. Especially if said networks have to offer interchange rates even higher than the current four to get issuers to sign on in the first place (since merchants are already balking at the current rates). To be honest, I'm surprised the US isn't more of a cash based society, though I guess decades of conditioning the public to not use it helps.
Anyway, my point was that four additional credit networks may not be viable in the US, at least not with acceptance anywhere close to as good as Visa/MC. Especially if said networks have to offer interchange rates even higher than the current four to get issuers to sign on in the first place (since merchants are already balking at the current rates). To be honest, I'm surprised the US isn't more of a cash based society, though I guess decades of conditioning the public to not use it helps.
I try to avoid cash 100% if I can
#473
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It is not in the interest of the greater economy to be cash-based. Cash is expensive to manage - even though the merchants don't like to admit this - since it increases chance of theft, requires time to count, bundle, and deliver to the bank (or you have to pay someone to do that for you); it also increases the likelihood of tax evasion. Merchants also don't like to admit that when someone shops with a credit card, they are more likely to spend more. For the consumer, cash is also a burden since it can be lost or stolen without a chance of recovery.
I try to avoid cash 100% if I can
I try to avoid cash 100% if I can
Of course, it's kinda late to put the genie back in the bottle now. Time will tell whether Kroger and others are completely successful at drastically reducing/eliminating interchange (though I think Visa/MC will ultimately have no choice in the end but to make some concessions in order for the US to fully adopt the contactless future they're envisioning).
#474
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I very rarely have any cash on me, and when I do, it's super rare that it will be more than about $20.
I could take that to ridiculous lengths in Iceland for example, I visited twice in the last couple of years, and I used zero cash both times. I don't even know what the local currency looks like, it was all credit card usage.
I could take that to ridiculous lengths in Iceland for example, I visited twice in the last couple of years, and I used zero cash both times. I don't even know what the local currency looks like, it was all credit card usage.
#475
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I very rarely have any cash on me, and when I do, it's super rare that it will be more than about $20.
I could take that to ridiculous lengths in Iceland for example, I visited twice in the last couple of years, and I used zero cash both times. I don't even know what the local currency looks like, it was all credit card usage.
Oh, the currency ,,,,,
Much to my surprise, I thought it would be Euro ..,
#476
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Speaking of contactless, apparently the significantly higher fees in New Zealand for it compared to EFTPOS (since it runs over Visa/MC) mean that a lot of places simply disable it altogether (example). I wouldn't be surprised if merchants in the US start doing the same if/when it becomes more commonly used.
That said, the situation in the US is different in that merchants don't like any of the interchange rates as currently levied, so contactless use in and of itself might not be the last straw that those who are already unhappy will use to justify no longer accepting e.g. Visa.
That said, the situation in the US is different in that merchants don't like any of the interchange rates as currently levied, so contactless use in and of itself might not be the last straw that those who are already unhappy will use to justify no longer accepting e.g. Visa.
#477
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Here is another set of arguments for going 100% cashless. I know that Iceland and Sweden are close.
"Scrapping physical currency, he argues, would help governments to collect more tax, fight crime and develop better monetary policy."
https://www.economist.com/finance-an...dents-in-peace
"Scrapping physical currency, he argues, would help governments to collect more tax, fight crime and develop better monetary policy."
https://www.economist.com/finance-an...dents-in-peace
#478
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Retailers Dont Like Paying the Fees for Your Apple Card
December 10, 2019, 12:00 AM HST
Premium plastic has become a flashpoint in negotiations between the countrys largest stores and the Visa and Mastercard networks.
By Jennifer Surane
This holiday season will be the first for the Apple Card, the highest-profile new credit card in years. And every time a customer waves an iPhone at the register to use the new card, a retailer may feel an extra pinch on its profits.
Thats because the card, marketed by Apple and backed by Goldman Sachs Group Inc., is designated elite, which allows it to levy significantly higher interchange fees on each swipe or tap. Those fees aren't paid by the consumer but by the merchant as part of the cost of accepting credit cards. A grocer can lose more than half its profit on a sale when someone pays with an Apple Card, or one of its elite competitors, rather than a normal card. Elite cards impose higher transaction fees to support generous reward programs for their customers.
https://www.bloomberg.com/news/artic...our-apple-card
Premium plastic has become a flashpoint in negotiations between the countrys largest stores and the Visa and Mastercard networks.
By Jennifer Surane
This holiday season will be the first for the Apple Card, the highest-profile new credit card in years. And every time a customer waves an iPhone at the register to use the new card, a retailer may feel an extra pinch on its profits.
Thats because the card, marketed by Apple and backed by Goldman Sachs Group Inc., is designated elite, which allows it to levy significantly higher interchange fees on each swipe or tap. Those fees aren't paid by the consumer but by the merchant as part of the cost of accepting credit cards. A grocer can lose more than half its profit on a sale when someone pays with an Apple Card, or one of its elite competitors, rather than a normal card. Elite cards impose higher transaction fees to support generous reward programs for their customers.
https://www.bloomberg.com/news/artic...our-apple-card
#479
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Not directly related, but we in HK has also noticed a slight reluctance by small merchants to take mobile payments https://www.hongkongcard.com/forum/show/27036?page=1, probably cos acquirers here have to also pay Apple/Google for the use of Apple/Google Pay, and pass it on to merchants.
#480
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I believe the Apple/Samsung/Google pay charge is not at the acquirer level in the US, but handled by Visa/MC/AmEx/Discover directly. It is supposed to be tested to a lower fraud rate (ROI). The volume has been so low, I have no idea how that will turn out though.
If a card actually gives elite benefits, I understand the layers. Apple Card is one of the worst not just because it has limited extra rewards options, but they removed almost all of the insurance benefits that the issuer would otherwise need to pay for from the merchant fee. It does appear in the US that the power is with the banks and acquirers - the networks are just signing off on whatever those entities want. I believe it was required at some point for the physical card to indicate the level (which could theoretically be used to discriminate card level acceptance, which is now allowed in the US), but again, Apple Card was able to remove that level print (WE or related) on the physical card. It probably was meaningless anyway because the mobile apps don't show it anyway (going back to the HK hesitancy).
I still feel merchants could do a lot more to create a compelling reason to not use traditional network cards that doesn't have to be only about discounts. I think there are many more soft benefits and loyalty ways that companies could better align with those why use alternative payment methods. Some have done it (RedCard, co-branded cards at Kohls and Gap Family, etc.), but most are afraid of losing customers.
I am still looking for some big moves in this space. Apple Card was really in the opposite direction. A so-so product that consumers widely adopted which didn't enhance the merchant or consumer experience. I am sure traditional US issuers are again confused why hype exceeded functionality or benefits.
If a card actually gives elite benefits, I understand the layers. Apple Card is one of the worst not just because it has limited extra rewards options, but they removed almost all of the insurance benefits that the issuer would otherwise need to pay for from the merchant fee. It does appear in the US that the power is with the banks and acquirers - the networks are just signing off on whatever those entities want. I believe it was required at some point for the physical card to indicate the level (which could theoretically be used to discriminate card level acceptance, which is now allowed in the US), but again, Apple Card was able to remove that level print (WE or related) on the physical card. It probably was meaningless anyway because the mobile apps don't show it anyway (going back to the HK hesitancy).
I still feel merchants could do a lot more to create a compelling reason to not use traditional network cards that doesn't have to be only about discounts. I think there are many more soft benefits and loyalty ways that companies could better align with those why use alternative payment methods. Some have done it (RedCard, co-branded cards at Kohls and Gap Family, etc.), but most are afraid of losing customers.
I am still looking for some big moves in this space. Apple Card was really in the opposite direction. A so-so product that consumers widely adopted which didn't enhance the merchant or consumer experience. I am sure traditional US issuers are again confused why hype exceeded functionality or benefits.