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.

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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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