AmriloJim wrote:GlytchMeister wrote:Oh, yeah, there's that, too. Every non-reload able card costs... What, something like three bucks? But that's the only charge.
On your side of the transaction. High-volume merchants pay about 1% plus equipment fees plus monthly services charges to process digital transactions. I ran a touch more than $20K in card revenue last year at 2.75%-3.5%, with no equipment or monthly fees.
Yup. Square, PayPal, etc. all end up hitting the small-business merchant for somewhere in the 2.5-3.5% range for commercial transactions.
In the end, you can expect that this will be reflected in the merchant's prices.
That's why merchants often offer a cash discount.
Here in California, there was for years a law which said that stores can't add a surcharge to the price to cover credit-card processing costs... they had to be willing to sell a product at their advertised price even if the buyer used a credit card, and "eat" the billing cost. Merchants could, however, offer a "cash discount" (e.g. "The price is $100, but if you pay cash I'll knock off 2%"). There was an exception for gasoline sales, which list separate "cash" and "credit" prices (except for Arco, which doesn't take credit cards at all).
A year or so ago, some merchants took the State to court, arguing that this restriction amounted to an unConstitutional restriction on their freedom of speech, because the State was dictating how they could legally talk about a price difference between "pay cash" and "pay via credit" even though the price difference was the same either way. The state disagreed, saying it wasn't about "speech" but about "deceptive advertising". The court took the merchants' side, and declared the state law to be unConstitutional (this decision is being appealed).
So, merchants here can now say "Add 2.5% to the price if you're paying by credit card" and be legal... as long as they do this clearly, in advance of the sale. (Adding the surcharge without mentioning it, or without saying anything until after the deal was struck, would be deceptive and is still illegal).
The contractor I'm dealing with for a furnace replacement job is doing it the "new way": the price estimate is for "cash or check", and "Please add 2.5% to cover processing fees if paying via credit card".
This actually seems pretty fair to me, since most credit cards these days offer a percentage of "cash back", which of course is coming out of what the merchant gets paid.