CardFellow

We don't know which rates Visa/MC are actually raising yet, but probably not. It has a lot to do with how/what processors charge.

Along with lowering costs, Optblue let processors add a markup to Amex transactions. (Previously they couldn't. That meant no incentive for processors to suggest or push Amex acceptance, as they didn't make money on Amex transactions.)

Now they can, and those markups tend to be higher than for Visa/MC. In egregious cases, the processor simply continues charging the business the old Amex rate (~3.5%) and pockets the entire difference between 3.5% and the new lower rates.

Yeah, credit assessment is .14, debit is .13.

>But why would you want to do the credit card company's work for them?

I'm not sure I'm following. The reason you'd do it is because you want to pay for a small purchase with your debit card. Like if you run into a gas station and buy a soda and a bag of chips but don't have cash on you.

>That regulation is in place purely because of political bribery by the credit card industry.

It's in place because it was determined that people shouldn't be subjected to a minimum purchase amount for paying with their own money through their debit card. (As opposed to paying with borrowed money through a credit card.)

>The consumer-friendly thing to do is to charge proper rates for things with higher processing fees, like credit cards, and not subsidize them by punishing everyone else.

Again, I'm not following. We're talking about minimum purchase amounts. What's punishing someone else?

The problem isn't that there aren't strong anti-fraud tools available, it's that businesses by and large don't use them. Merchants struggle as a whole to get to even 50% of card-accepting businesses actually being PCI compliant (the security regulations for accepting cards) and the ones that become compliant often fall out of compliance again within a year.

>Being able to use a RFID/NFC reader in close proximity to someones wallet (like in their back pocket, standing ahead of you in line) and being able to charge their card without even touching it is not a very good thing lol.

It's not, but it's also extremely uncommon. The cards people have aren't typically RFID, and NFC has a much narrower range.

The problem is that as far as pricing is concerned, regulating at the interchange level isn't going to have the effect people want. That's what happened with the Durbin Amendment.. it capped regulated debit at 0.05% and 22 cents at the interchange level... but processors can still add whatever fees they want on top of that.

Indeed, and it's part of why Square was a (ha) square peg in a round hole. Incidentally, it's also why they have other pricing now that does have a per-transaction fee.

They actually only do get a tiny slice.

Interchange fees to the issuing banks start around 1.5% while Visa's volume assessment is only 0.13%.

But they get a tiny slice on an ungodly amount of transactions, so it adds up.

Nah, they've been fine with cash discounts for a long time. They only became okay with surcharging / adding a fee for cards as a result of a lawsuit in 2013. They'd still prefer businesses offer a cash discount, though. They know customers generally don't take them up on it, but also don't feel punished like they do with a surcharge.

Businesses actually aren't allowed to impose minimums on debit cards. Some still try it, but technically you can report them.

Definitely the case for some, I know a lot of developers love Stripe's documentation. But some others just plain equate simplicity and low cost. They have no idea how to read their complex merchant processing statement, there are all these rates and fees.. Square or Stripe comes along, bundles everything into a simple-to-understand rate, and they think it must be cheaper.

I'll agree that processing is surprisingly lightly-regulated.

It's true that they don't change prices daily, but it's also not particularly uncommon for them to do so. Visa raised an assessment I think last January? And interchange fees have changed several times over the years as well.

Visa / MC rates aren't 2.5%.

There are multiple components to the final rate that a business pays, with the bulk of it being interchange, which goes to the banks that issue cards. Visa/MC only get assessments and dues, which are significantly smaller. (Visa's volume assessment is 0.13%, for example.)

We need to know which fees they're raising, and by how much, to know what sort of impact this will have.

Cash discounts are legal in all states and permissible by merchant agreements.