Credit card processing fees

Credit card processing fees, a related but relevant tangent.

Brazil’s central bank started an effective payment system. Hoping the Fed does something similar. There’s no reason for CC companies to siphon 2-3% of restaurant revenue.


deep breath


hoo boy. My turn next:

“Sure hope we get a National Heath Care system, soon.”

What? We’re not doing “totally common sense ideas that have no chance of happening with a government completely captive to corporate interests” ?

My bad.

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I don’t know man. Miss me with the attitude. Of course I’m aware of what our government does and doesn’t do. But they did, shockingly, pass IRA. Overton window has shifted on lots of issues in the last decade. Of course I don’t think it’ll happen. It may still be worthwhile to set as a goal.

And I get that this thread touches politics, but I have no need for a comment like this. If I wanna get harangued by a stranger I’ll go to Twitter. Just totally unnecessary. Good luck.

no no. you’ve got a point.

sometimes my cynicism gets the better of me. I should keep that off of here as much as possible.

my bad. for real this time.

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I appreciate that. All good. And in general I do appreciate your comments/perspective.

company provides service and gets paid for service. what am I missing here?

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credit cards get paid for extending people credit, in the form of interest. why should the merchant have to pay part of that fee? Cash is free. People can use Zelle to transfer money direct from their bank account for free. So what service are they providing the restaurant, now that they no longer monopolize the cashless payment space?

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Markets don’t exist in a state of nature, and governments regulate to serve specific interests one way or another. Before 1913, checks didn’t clear at par. Banks could charge whatever they wanted to process checks, but the government decided it was in the public interest to regulate and cap those fees. Banks still found ways to make money.

Right now it’s regulated/unregulated to serve a few large corporations siphoning a large chunk of small business revenue in a de facto monopoly. The EU has decided to regulate interchange fees differently, capped at .2%. What cc companies charge is not what it costs them to perform this service. Of course they should make some profit, but the market is anti competitive and hurts small business. I would be fine if they introduced competition or (I do agree is a pie in the sky) a Fed run digital payment processing. Or just cap the interchange fees, though to @lectroid point I doubt we’ll get something close to Europe.

*that’s my perspective at least. Maybe I’m missing something, and I get there are different philosophies on markets/regulation.

Access to cash strapped customers for a small 3% fee.

Restaurants are totally capable of putting an ATM machine in the corner and taking cash only. I tend to avoid such places, so it seems to me that credit cards do provide a valuable service to restaurants.

That’s my point. They are not the only avenue for that. I can transfer you, or my mother, or any one who’s registered to a participating bank (most all of them, I think) any amount up to $2000 directly from my account to theirs, with 0 fees and with transfer completed inside of 30 min.

Canada has a similar universal cash transfer system. All you need is a cell phone.

If I were a business and wanted to avoid the cc company bite, I’d encourage my customers to just Zelle me the funds.

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No cash to steal.

This only works if your customers have cash in the bank. Visa gives access to those without for 3%.

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The interchange fees are on the business side. But I get your point that CCs may grow the pie enough to defray the 3%.

On the larger issue I think government assures commerce and can regulate towards whatever interests it chooses.

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I am disappointed this thread did not get the ‘Threat or Menace’ subtitle.


This is very reasonable topic for discussion on this board, it was just tangential to service charges.


if you’re going to be all reasonable and logical about it I don’t think we can work together…

(this is SUPPOSED to be funny. Is it funny? … well, NOW it isn’t…)


I presume the processing fee is how the benefits (esp the credit cards w/ the more lavish customer benefits) are funded. Not saying that this is right or wrong, but…

I’m a small business and don’t accept credit cards. But I also have a very diff “sales” model from a restaurant (my charges are all well-known ahead of the transaction, and I am not reliant on being paid immediately for the service).

Additional edit: TBH, I avoid restaurants that are cash-only just b/c of the convenience. So I would say that restaurants are most likely getting more than 3% back from increased customer base. However, I am also fine w/ vendors applying a surcharge when using a credit card.

The thing that bothers me about credit cards is the terrifying interest rates… which are also not consistent w/ what is charged in other countries.

I can’t answer for restaurants, but, in my industry (healthcare), credit-card transactions are specifically exempted from certain privacy laws. Venmo, PayPal, and Zelle are not exempt and are non-compliant w/ said privacy laws.

Yes, but the window has shifted in the other direction, too. I participate in one very business-minded board, and the posters there generally have no sympathy (or empathy) for varying levels of financial literacy. It is… an unnecessary harsh perspective that they have. But I think it is one that is not at all uncommon. Perhaps that harsh view is actually the more common one. ::shudder::


I have friends in the same field (guessing) and until recently didn’t know that about Paypal, Venmo privacy stuff. Anyway…

I’m somewhat persuaded by @Ns1 that credit cards prob grow the pie more than 3%, though it still feels like government could regulate interchange fees a little more aggressively to benefit small business. Credit card interest rates for consumers are crazy. Wonder if that will become a political issue. Certainly a broader, less caricaturable constituency than student debt, whatever one thinks about that.

And I’m always interested in opinions outside my bubble, especially since I don’t live in the South anymore and get confronted/challenged daily. Not to get too political, but I hope we aren’t back to debating things like social security.

it has continually been a political issue, but one that rarely draws continued media attention… during the obama years, a new government agency, the consumer financial protection bureau, was created specifically for protecting consumers from predatory financial practices. during the following administration, its teeth were significantly dulled, currently its back to it (Column: $1 fines from consumer agency were common under Trump. That's about to change).

there’s currently a bill in the senate to try to place more limits on credit card rates, but the powers of the finance industry are immense (Whitehouse, Reed, Warren, Sanders, Merkley Introduce Bill to Shield Americans from Sky-High Credit Card Rates)