So you hate getting something back for choosing one payment method over another when there's no indication that retail stores would lower their prices if credit cards (and their transaction fees) were wiped out?
> there's no indication that retail stores would lower their prices
Competition will lead to that. It doesn't happen immediately, it happens in waves. These are called price wars. When that happens, they try to undercut competition at every possible turn, and having lower payment processing fees allows them to go lower. Who wins a price war? The consumer.
Yes: points are ridiculous. The fact that credit card fees are passed on to cash payers is ridiculous. Visa and Mastercard are absolutely minted. Where does that money come from? You and I.
(and: why does competition not work for Visa and Mastercard as well as it does for retailers? Because the feedback loop is much longer. Intractable, in practice. Choosing one retailer or the other is a clear signal we can send. But are we going to choose merchants based on payment processor support? As for merchants, they're stuck in an oligopoly. Competition is gone, leading to this unhealthy market.)
There is some indication of that - gas stations have seemed to be leading the push here, with "cash-only" prices, but you'll also see places with CC fees or minimums (as much as the providers try to crack down on this).
This goes through cycles every few years. We seem to be in the cash discount part of the cycle now. Then stations discover they don't like losing customers who want to pay by credit but are getting "ripped off." Admittedly apps may make things different this go-round.
> They are probably illegal (or against contracts) in most states, but you see them very often.
Minimum purchase requirements for credit cards were explicitly legalized in the US in 2010 as part of Dodd-Frank. Merchant agreements are not legally allowed to prohibit them.
nothrabannosir|7 years ago
Competition will lead to that. It doesn't happen immediately, it happens in waves. These are called price wars. When that happens, they try to undercut competition at every possible turn, and having lower payment processing fees allows them to go lower. Who wins a price war? The consumer.
Yes: points are ridiculous. The fact that credit card fees are passed on to cash payers is ridiculous. Visa and Mastercard are absolutely minted. Where does that money come from? You and I.
(and: why does competition not work for Visa and Mastercard as well as it does for retailers? Because the feedback loop is much longer. Intractable, in practice. Choosing one retailer or the other is a clear signal we can send. But are we going to choose merchants based on payment processor support? As for merchants, they're stuck in an oligopoly. Competition is gone, leading to this unhealthy market.)
majormajor|7 years ago
ghaff|7 years ago
ardit33|7 years ago
They are probably illegal (or against contracts) in most states, but you see them very often.
Marsymars|7 years ago
Minimum purchase requirements for credit cards were explicitly legalized in the US in 2010 as part of Dodd-Frank. Merchant agreements are not legally allowed to prohibit them.