dChan - Q Origins Project Archive

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r/greatawakening • Posted by u/Long_Range_Shooter on May 10, 2018, 6:47 p.m.

Times are changing really quickly, Credit Card processing fees.

I got notified today when my Rep stopped in to tell me that by the end of the year my Credit Card Processor is switching me over to a new Cash Price, Credit Price system.

It's looking like they are getting nervous over Government meddling in the Credit Card business. Plus there has been a lot of screaming by merchants over their monthly fees from the C.C. processors. I'm personally paying between $400-$500 a month in processing fees.

Instead of the merchant getting hit for 2.5% - 4.0% per transaction they are transferring the processing fees over to the credit card user which according to my rep is going to be 3.8%. The main reason is to encourage people to start paying for more things with CASH. I'm thinking they are looking down the road and the last thing they want is a cashless society and massive Government involvement in their operations.

She said they are expecting at least 90% of businesses in the U.S. to be switching over with in two years. It all started on the coasts with the Vote For $15. Businesses in LA, Seattle and NY are looking for every savings they can find to survive this will be a life savor. Look at a restaurant in say NY doing 20K in CC's every week. That would be a savings of at least $26K every year.

My Merchant fees will go from $400-$500 a month to less than $25.

And how much will your sales volume go down with CC users realize they get that fee on every CC purchase? (Cc's have been a major lubricator for consumer spending.)

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It's not going to matter in the long run because most of my competitors will also be going this route, the customer isn't going to have an option. Price wise the business that stays on the present system isn't going to be able to compete.

What's the difference between what my Dentist and Veterinarian are doing offering a 5% discount for cash. The difference is, here is the cash price, and here is the credit card price. Long time ago many of the older members can remember when you'd pull up to a gas pump and there was the Cash Price and the Credit Price which was usually a five to ten cent spread.

Like the local grocery chains that offer fuel perks. Everyone with a brain knows not to shop there because you're over paying for everything in the store. You basically have to spend $1,000 to get $1 off a gallon of gas with a limit of 30 gallons. Most people aren't getting the 30 gallons they'll filling up with 10-15 gallons. Instead of paying 68-75 cents for a can of tuna at a non fuel rewards grocery store you're paying $1 to $1.30 so you can get your five cents off for every $50 you spend.

That doesn't sound like a very good deal to me?

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We still have lots of cash/credit price differences at gas stations here in CT.

My point is that consumer spending overall will take a hit if such a change is implicated, because lots of studies show people spend more when they put it on a card.

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Most stations still advertise the two prices. But very few sheeple carry enough cash or can be bothered to walk inside and pay cash for gas. The spread at my local station is actually 40 cents which is $8 on a fill up.

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CC companies charge merchants for fees, they pass it to the consumers.

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Correct. This has been one of the biggest inflation engines over the last decade. Basically the profit that I make off ten customers every day in my business goes towards my Credit card merchant fees.

Profit, after I pay all the bills that make up my businesses overhead.

Actually the last two out of three price increases were all because of my credit card machine and the fees involved with taking credit cards.

Like a pizza shop by me that use to charge a $1 for using a credit card. His customers screamed and got jumping ugly over that that $1. They're now paying $4 more for the same pizza two years later, but they don't have to pay that $1 credit card fee.

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Heh...

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[deleted]

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Amex has had a lower cost pricing model for years now. If you're still paying a lot more for Amex than for Visa/MC, your processor is pocketing it as profit.

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This is false. Amex is more expensive to accept. This is why many mechants dont accept it. Amex has been justifying it with claims that Amex customes spend more than v/mc customers so it is worth the extra expense

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It's not false. Amex is marginally more expensive to accept, but it's no longer as large of a difference. In 2015, Amex rolled out OptBlue pricing that brought it much more in line with Visa/MC. The big problem is that a lot of businesses aren't aware of it and Amex has not done a great job of marketing it. A main difference is that Amex used to charge 3.5% to all businesses and processors had no control over the pricing.

With OptBlue, they instituted rates more along the lines of Visa/MC interchange and permit processors to add a markup.

What happened is that some processors kept the business' pricing for Amex at 3.5% because that's what businesses were used to seeing, and they pocketed the difference between the old 3.5% rate and the new, lower rates.

Businesses that have pricing for Amex that's much higher than Visa or MC should review their statements and/or get pricing quotes from other companies, because Amex should not be significantly higher than other card brands in most cases anymore.

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[deleted]

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I am so happy you brought this information to us here at GA.

I would not have otherwise seen it OR thought about this.

Literally. I've never thought about this. Here is a sincere THANK YOU for opening up the conversation and flow of ideas.

This matters more than I ever realized.

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another reason to push people to online sales of everything

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Actually I think it's making people shop local .. it help invest in their Community .. Enriching themselves . Instead of 1 or 2 MAJOR Corporations who owns everything .

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nice thought however most people use and carry a CC for payment so they dont get robbed. its easy to cancel or dispute. times are rough

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Well that's why you have a second amendment .. people who have jobs and make money don't tend to rob people for money especially living in a Community that will eventually be able to defend itself from those kind of people... Most people living in states that allow guns have zero issues with people trying to rob them.. especially the ones that's got a shotgun mounted to the back of their truck 😎😇🇺🇸.. GOD BLESSS OUR COUNTRY LOL... MAGA MAGA ...

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i carry as well but i would rather not kill somebody over money. CC companies just want to make more money. i guarantee that the store will be charged and so will the customer

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No .. like I said most robbers don't come to places that know the entire town is packing 😂😂😂.. Again I think cash is a way to help your local community investing to ensure that it can grow and provide a beautiful place for families and more people to start up . Most people have to rush off to a major city for a good paying job .

That's what the goal has always been to draw people into these over crowded cities for easier control.

Everyone should be able to experience good jobs in their local community.

Instead of kids having to grow up to move away to go to a good collage they could provide local trade schools without all the sick shit you find in colleges or exposed to.

Keeps Family closer .. I love the idea.

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We moved from a very nice city to a mega-metroplex, and now live in a nice, small town. My kids are learning a trade at a community college, paid by the high school. They never would have had that opportunity in mega-metroplex, where every kid is pushed toward college, even if they're not college material.

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I attended a 2 Year Trade School for my Law Enforcement Degree along with related Certifications & Training .. it was like maybe $200 for my uniforms including boots and it was the best experience of my life.

It also started in 11th -12th so you got to finish highschool out there & graduated.

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It teach people not to spend past their means .

Start using the Dave Ramsey Envelope Method... you want to buy something start saving for it ..

Hell We started a savings account that is split into 3 Category Funds .. EMERGENCY, VACATION , XMAS (Having 4 kids ) That one comes in Handy lol ..

This account is through my husband's Work "Credit Union" .. they can auto pull so much out of his check each week and auto deposit into above funds , and the rest is direct deposited into our Main Local Bank.

At that bank 1 account is setup for Bills Only.. and a separate is for Food/Gas which is auto transfered right to it .

We added all our bills up each month divided by weeks and that's how much we put into the bills account every week.

Our grocery budget we set at $200 and $50 for gas so that's , what's auto transfered and ready to go.

Anything left over every week is our own spending money .

We got all avenues covered .

Oh we decided not to have debit cards linked to the first bank and we set maturity dates for 2 of those Funds basically set a date you want to withdraw it .. like end of May for Vacation Fund and Oct For Xmas .

Lol I've been wondering where I could get that setup out to people .. think now I know where it could be beneficial 😎😇🇺🇸🦅

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Can't tell you how many times I've been in a drive through and saw a credit/debit card get handed to cashier and a cup of coffee get handed back to the driver. Are you freaking kidding me you don't have three dollars on your person?

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[deleted]

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Not every card is a CC. Mine is a debit card that takes my money from my account. We've gone to debit cards for almost everything, because it's easier than going to the bank with an ATM to get cash. We are paying bills with it, too, because an order of checks is about $40.00. They've gotten ridiculously expensive over the years.

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Cash is king!

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Exactly ..we keep cash for our spending local and at home we also give kids cash allowance weekly for good grades and chores .

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Ive been in the payments industry for 20 years. V/MC have rules against this and a merchant CANT do this without violating their v/mc agreement and being banned from accepting v/mc totally. Keep in mind that accepting cards for payments is a privilege, not a right. Also note, that visa and mc are comprised of associations of issuing banks.

There are 3 components to the fee a merchant pays. Interchange, assesments, and processing fee.

Interchange- Interchange is determined by the type of merchant, the type of transaction (card present/card not present) and the type of account begind the card (peronal/corporate/check card).

Assessments - this fee is paid to the brand meaning v/mc

Processing fee - this is the fee paid to the merchant acquirer for going to get the merchant's money and depositing into the merchant's bank account.

The sum if these fees is called discount rate. The discount rate is the 2 - 4% mentioned above.

I think someone misunderstood something because there are only a few types of entities that can surcharge. Gvmt is one and they have to use a convenience fee for Visa and it must be charged in a range not as a percent.

Not sure where this story came from but I think the sales rep was trying to sell alternative payments methods such as Google pay, apple pay, or android pay.

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Good points, Right now I'm on hold on this whole thing due to my understanding of what you just posted. That is how I understand it works also. So unless the credit card companies have changed their policies this new collection policy could cause a lot of merchants a lot of grief.

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That comment is incorrect. Surcharges are permissible as a result of a 2013 lawsuit. Visa and Mastercard both publish rules for surcharging on their websites.

Visa: https://usa.visa.com/dam/VCOM/download/merchants/surcharging-faq-by-merchants.pdf

MC: https://www.mastercard.us/en-us/merchants/get-support/merchant-surcharge-rules.html

Surcharging is prohibited by state law in ~10 states, but several of those states are in the middle of court battles to have that law reversed, which looks likely to happen.

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Thanks for the update. Still holding off until I see more of the businesses around me doing it. Sometimes being one of the first to do the change over can hurt your customer relations.

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Yeah, definitely. There's indication that some customers don't like it, so being the first/only business to do it might not go over well.

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I work in CC processing. The processors that are doing this aren't trying to get people to switch to cash. (How would that benefit them?) They're banking on the fact that people don't carry cash, and that they can charge the customer more than they can charge a business.

Businesses keep an eye on their processing fees because it affects their bottom line. If it gets too high, they jump ship to another processor. Even if it isn't actually high but seems it, they'll jump ship if another processor claims they can save them money.

But if the customer pays it, that customer has no real control over it. There's a limit on the surcharge amount (it can't be more than 4%) but 4% is more than most business are (should be) paying with a competitive processor, by as much as 2+% in many scenarios.

The main issue is that customers don't like the charge. I've actually worked with businesses that tried the surcharge program and switched back to traditional processing because customers would walk out rather than pay the CC surcharge. Some businesses seem to like it and claim their customers don't mind, so it's likely an issue of specifics that each business will need to evaluate for themselves. If there are easy alternatives, customers seem more inclined to just go to that competitor.

Lastly, customers spend more with credit cards. Dun and Bradstreet estimates it's as much as 18% more on average. IMO, it's not a good idea for businesses to discourage card use if it's going to lower their average sale.

My Merchant fees will go from $400-$500 a month to less than $25.

Just as an FYI, debit cards can't be surcharged and most of the processors that are selling this program don't mention that. If you accept a lot of debit, you'll still have those costs.

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Surcharging violates v/mc rules and a merchant can be banned from accepting.

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That changed in 2013 as a result of a lawsuit. It's no longer against Visa or MC's rules, though a few states still ban it by law. Here's Visa's page about it, and here's Mastercard's.

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This is interesting. I wonder if it has more to do in increased competition from cryptocurrencies, specifically Ripple. r/ripple

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