> Credit card companies do not charge 4%. I worked in credit cards about a decade ago, so unless the marketplace is less competitive now than before, I assume this still holds true. Furthermore, the fees that do exist are not necessarily passed on the consumer, but taken out of profit.
This isn't entirely accurate. Most credit card companies now tack on a 30c + 2.9% surcharge for processors that do fewer transactions than some arbitrarily defined limit, well known to most small companies as the "PayPal tax" because they started doing it first and the credit card companies realized they could get away with it too.
And it's usually passed completely on to consumers, because eating it as a business owner with a low-margin business is pretty damned hard, and because the little guys are doing it, the big guys get away with doing it too.
Or haven't you heard about the recent record profits being made by Mastercard et al?
This isn't entirely accurate. Most credit card companies now tack on a 30c + 2.9% surcharge for processors that do fewer transactions than some arbitrarily defined limit, well known to most small companies as the "PayPal tax" because they started doing it first and the credit card companies realized they could get away with it too.
And it's usually passed completely on to consumers, because eating it as a business owner with a low-margin business is pretty damned hard, and because the little guys are doing it, the big guys get away with doing it too.
Or haven't you heard about the recent record profits being made by Mastercard et al?