Ask Lemmy
A Fediverse community for open-ended, thought provoking questions
Rules: (interactive)
1) Be nice and; have fun
Doxxing, trolling, sealioning, racism, and toxicity are not welcomed in AskLemmy. Remember what your mother said: if you can't say something nice, don't say anything at all. In addition, the site-wide Lemmy.world terms of service also apply here. Please familiarize yourself with them
2) All posts must end with a '?'
This is sort of like Jeopardy. Please phrase all post titles in the form of a proper question ending with ?
3) No spam
Please do not flood the community with nonsense. Actual suspected spammers will be banned on site. No astroturfing.
4) NSFW is okay, within reason
Just remember to tag posts with either a content warning or a [NSFW] tag. Overtly sexual posts are not allowed, please direct them to either !asklemmyafterdark@lemmy.world or !asklemmynsfw@lemmynsfw.com.
NSFW comments should be restricted to posts tagged [NSFW].
5) This is not a support community.
It is not a place for 'how do I?', type questions.
If you have any questions regarding the site itself or would like to report a community, please direct them to Lemmy.world Support or email info@lemmy.world. For other questions check our partnered communities list, or use the search function.
6) No US Politics.
Please don't post about current US Politics. If you need to do this, try !politicaldiscussion@lemmy.world or !askusa@discuss.online
Reminder: The terms of service apply here too.
Partnered Communities:
Logo design credit goes to: tubbadu
view the rest of the comments
When I buy from a small business that I want to support, I will use cash. When I'm buying anything from a large company, I will always use the fanciest credit cards in my wallet.
In the United States, credit card processing fees are more expensive for fancy rewards credit cards and obviously there's no fee for cash.
That's why nobody takes Discover or Amex. Their fees are higher than Visa and Mastercard.
amex is taken in 9 out of 10 places when I use it. it's usually small places that don't take it
I literally cannot think of any places that don't take Discover.
Hmm go figure your mom gives me a hard time about it every time.
It's the most-commonly rejected card. It has high fees without the clout of Amex. Amex customers are typically pretty wealthy and places will accept them because of their high-roller status. But Discover doesn't have that going for them, so there's less reason to accept the card.
Where you'll find it rejected most often is small shops and government agencies.
For instance, my career has been in government, and no organization I've worked for has ever accepted Discover. We aren't allowed to "profit" from our fees, so we have to include credit card processing in the adopted fee schedule. But since we can't profit, we have to set the fee at whatever Visa and Mastercard charge. That extra 1 or 2 percent Discover charges can be millions for a large government (large city, statewide agency, etc). So, agencies simply don't take Discover (and frequently AmEx, though they'll sometimes negotiate).
Large retailers are able to negotiate better deals with Amex and Discover, but for smaller shops it just isn't gonna happen. And that 1-2% (of the total charge) extra taken by the card processor is huge when your margins are small.
Heck - even the Visa and Mastercard fees are a huge deal. When I worked in retail management, those fees were secretly the big reason we pushed our store-brand credit cards. It wasn't the 80 dollar commission for the account the store got - it was that if someone used our card in our store, we didn't pay the processing fee.
We'd give 2% in points back for using the card in the store, which was a great deal for us since we didn't have to pay the 3-4% fee to the processor.
It is definitely not true that Discover interchange rates are significantly higher than Visa or Mastercard.
I've put below a list of the actual interchange rates for various personal Visa, Mastercard, and Discover cards types.
Debit:
Base credit tiers:
Rewards cards:
Premium cards:
You can plainly see that Discover tends to be more expensive than Visa but is cheaper than Mastercard. The only reason I could see that someone might refuse Discover is because Discover cards are all rewards credit cards that go into the higher tiers, whereas many Visa and Mastercard cards are debit cards which go into the lowest tier.
What is a regulated debit card?
A card which is subject to central bank regulations regarding the interchange fees which they are allowed to charge. According to the Dodd-Frank Wall Street Reform & Consumer Protection Act 2011, the Federal Reserve has the power to limit debit card interchange fees for debit cards issued by large banks with over $10 billion in assets. A "regulated debit card" issued by a bank subject to the regulation is therefore tariffed at the maximum rate allowed by the regulation, which is 0.05% plus 22 cents.
Thanks, curious about this too.
The small retailer I worked for didn't take Discover. We took Amex though, because it was high-end and wealthy people love their Amex.
Editing to clarify, had to dash off before: wealthy people love their extra-thick Amex Black Card made of titanium or whatever, that we used to have to type in by hand because it would damage the old slide readers. So as long as we were taking those we took regular Amex cards too.
Amex is such a douchebag rich person flex. The credit card equivalent of a Laboubou collection.
Amex isn't exclusive at all. Anyone can go apply for one and get one. It's not special at all
It costs more for the merchant and cardholder. That's why rich people flex with it. Because they can afford to pay more and cost others more for no reason.
Maybe more for the seller, I don't know but the cost to me is... Nothing. Well the benefit to me is about 3% back on anything I buy. No fees. Just another cheap card.
The seller isn't eating the loss. It's all passed to us poors.
You both are so very close to the real selling point those fucknuts are frothy over their Amex black card: they get to cosplay as royalty, oppressing the poors with a simple gesture. 🤌🏼
There's a queue at the guillotine for these people. It's not as popular as the ones for "elected officials", warmongers, fascists, or even longtime tyrants, to be sure —but it's there. 🖕🏼
The Amex Black Card is the one I was starting to refer to, I got interrupted and decided to hit the button rather than elucidate further. Sorry. You can look up the requirements and benefits, it wouldn't be good for me but for someone who travels a lot and throws big expensive parties it might. Or if they're basically a corporation
anyone can get an amex. unless you're talking about a platinum or black card? those have minimum spending requirements per year to keep them.
Yeah the black one
Lol what? It's just another generic credit card.
It's actually a charge card. You're expected to pay it off every month.
No, mine is a credit card, not a charge card. They would love for me not to pay it off every month.
Got mine when I when I was living in a trailer park. What are you on about?
I use discover everywhere, pay 90% of my bills with it. No one uses amex anymore. Pay off all of my cc at end of month, that's how I stick it to the man. Use their money for a month or so and get money for it.
What you get out of it is generally less than the processing fees. That's how reward cards work. The seller has to pay the processor to process the payment, and you get a portion of that as a reward.
It may feel like free money to you, but that processing fee is built into the price of anything you purchase.
You aren't sticking it to anybody.
The things or services I pay with my cc don't have cash discounts, so no reason to use cash, if you pay them off every month and never carry a balance the cc company doesn't make money off of my use and pay me to use their money. I'm sticking it to the cc company. Also as you have pointed out that all sellers build the processing fee into their prices I wouldn't save anything by paying cash.
The CC company makes a killing off your purchases. They charge a fee to the merchant for every transaction. Between that fee and a separate fee for processing the fee, they end up charging between 3.5 and 6 percent more on the transaction, while handing out 2-3 percent in rewards if you're lucky.
The reason there isn't a cash discount most places is because it's actually against the terms of service with the CC company/processors for the merchant to charge more for their customers. The CC company essentially requires that everything be more expensive for everyone whether or not they actually use the cards.
The card companies make absolutely stupid money off those fees.
over here, the extra cost that comes from handling cash is enough that small businesses don't want to take it. counting till every day adds up.
Surprisingly not in the US. If you make 100 sales a day of $20 each, then over a six-day week, you'd pay roughly $360 in credit card transaction fees (assuming 2.5% + 10¢ per transaction which is average). If you instead spent half an hour a day counting cash in the till and then half an hour at the end of the week to go to the bank, that's about $98 in labour cost (assuming a labour cost of $28 per hour, which is roughly $25 per hour in wages and $3 per hour in tax), so the savings are $262 per week, which is not insignificant.
yeah that 10¢ is 10x our transaction cost.
Banks also charge for cash services, many business accounts may just include it in the price, but someone has to physically count, collate and move around the cash, often with security. There are costs for running a computer system, and costs for using cash that businesses have always paid. Some small businesses definitely do not understand that, but cashless can be cheaper and safer depending on your country and quality of banking services.
I can't comment on the situation in other countries, but in the US, in the majority of cases, it's cheaper for businesses to take cash. In the US, the first few thousand dollars of cash deposits are typically free every month. Beyond that, pricing varies. My bank charges 0.35% on cash deposits, which is considered quite high, though it works out to only $42 per week in my example above. The credit union I have my personal accounts with charges 0.15%, which would be $18 a week.
The cost of labour has already been factored in and it still results in savings. The cost of security is comparatively negligible. A $300 safe is a one-off purchase that pays for itself in a fortnight.
I used to do that, but here (Australia) passing on surcharges has sadly been normalised, and during covid heaps of businesses went cashless.
The salt in the wound is that there's not really any reason for businesses to push payment gateways for a better deal. They don't give a shit any more as they just pass it into the customer.
Some American states (not mine) have banned surcharging for credit cards in response to consumer backlash. But what's not banned is marking up everything by 3% and then offering a 3% cash discount.