islandoid

Merchants generally don't pay for this, they pass the costs of card use in the form of higher prices. "The merchant cost pass-through results in a retail price increase of 1.42 percent for U.S. consumers and 1.71 percent for Canadian consumers...". (Felt et al. [2020] [Chart at bottom of p.44], "Distributional Effects of
Payment Card Pricing and Merchant Cost Pass-through in the United States and Canada," published by the Federal Reserve Bank of Kansas.)

The system should be changed so that credit card users pay the cost of using their cards, rather than causing inflated prices by using them. Merchants should have to pay only for the hardware and software they use, and costs (if any) associated with their banking.

islandoid

The airlines will just have to adjust their business models. It is simply a question of whether the airfare is paid directly by the traveler, or whether it is paid by a subsidy imposed on the general public through the higher prices caused by the use of credit cards and the "rewards" involved.

tmiw

The reason why many of the previous state-level anti-surcharging laws went away was due to SCOTUS ruling against them on First Amendment grounds. I'm not sure if there's a way to write such a law that makes it viable (though IANAL so I'm probably wrong on that).

Yep, especially since there are CC benefits other than points/miles (such as extended warranties and trip protection) that would very likely go away if this passes. Or at the very least, end up only applying if the transaction routes over the "more expensive" network (whatever that ends up being for the card being used), which I imagine will cause some nasty surprises for some who actually need to take advantage of those benefits.

The EU in general has much better consumer protections than the US does. While the US arguably should improve those, I don't see that happening any time soon regardless of whether this bill passes.

islandoid

It would need to be done at the federal rather than state level. I'm pretty sure what came into play was the Supremacy Clause of the Constitution, since the federal government has "occupied the field" of regulating the credit card industry. In fields that federal law (or the Constitution) have not occupied, individual states are free to set their own laws and regulations. Another aspect, usually enforced through case law, is the federal government's desire to have "uniformity" across the nation regarding how certain kinds of commerce operate, and such cases rely on the Commerce Clause of the Constitution, and what's called the Dormant Commerce Clause. Likely there is also a desire to have uniformity in how credit (and debit) cards operate across the nation.

The card companies likely could still offer such benefits through their ability (from their large scale), to do them as group policies for their card holders. It may add a bit to the cost to card holders of each card use (or a particular card use), but nonetheless the insurance could be low-cost.

bigbuy

I'll back your question up mia. Use to own a retail business. Here are the figures for my average sales reciepts from my memory.
1- Cash $11
2- Check $14
3-Discover $17
4- Master Card $23
5- Visa $26
6- AMEX $31

islandoid

Thanks, BigBuy. I have tried replying twice to Mia's reply to me, but those replies haven't been posted to the board. My replies were on the up-and-up, so I have no idea why. She asked for info to back up what I said, and I was trying to provide it.

SanDiego1K

The posts are now approved. When a new member begins to participate - which we appreciate; it's the only way for the board to be sustained - the posts have to be approved. The forum mod has to be online, read the post and approve it. Everyone is a volunteer and there can be a delay in that happening. Thank you very much for your contribution.

islandoid

Thank you.

bigbuy

I'm pretty sure that mia refers to Miami international airport and that the poster is a guy but I may be wrong.

oliver2002

The economist had a nice article on the topic:



https://www.economist.com/special-re...the-rich-world

travelinmanS

What will happen to all the travel blogs/trip report blogs? Without the allure of a first class trip to Paris using points earned from clicking on their sign up links, I’m not sure how they survive.

tmiw

$2.25 is probably the average but there are a lot of smaller stores that end up paying closer to $3, and possibly more if they're really getting screwed over by their processor. That's not to say that it's more expensive than cash for anyone, mind you, but I can see why stores in the US seem to dislike cards more than some other places I've been to.

(BTW, disabling JavaScript lets you read the article without the registration prompt if you don't have an Economist subscription.)

eddyatft

I hope the list above indicates that users with those credit cards are spending more at your business.
But if the above are showing the inflated price because of credit card processing fee, then you make a lot more in profit ??

eddyatft

I bet if they lowered the fee and most credit card users dropped the card, merchants would end up refusing to accept credit cards altogether.
I remember 20+ years ago, most merchants did not accept credit cards as either new technology or flatly refused to accept a "delayed" payment and the associated fee with a credit card.
Imagine bringing cash when you travel across the border and the hassle that comes with it.

oliver2002

Dropping the interchange to 0.2-0-3% was a major success factor for merchants in Europe to accept cards during the pandemic. CC acceptance was terrible in comparison to the US.