I am not sure exactly how the system works in the US but credit card fees here in Canada are a pox on retailers. A merchant here pay between 1.5% and 4% of the transaction amount to the credit card processor depending on the size of the business, it's volume and so on.
Other bank love stories.
- The banks also charge merchants a cash handling fee of X$ per $1,000 deposited because "handling all that cash is a lot of work and costs us money."
- There is a monthly rental fee for the electronic payment terminal you swipe your cards through.
- There are service charges of varied amounts depending on what your balance is in your account.
- Programs like Air Miles often cost the retailer small fortunes to run (and the retailer does not own the information collected under the miles program).
- Retailers everywhere are collecting customer data in unprecidented volumes to use in marketing or planning. I worry about safe data storage of this data (there are rules and where I work we spend a fortune keeping this stuff encrypted etc but it still worries me).
- Banks can charge retailers different rates for different types of cards. I.E. a "preferred card" may cost more % than a "non preferred one" etc.
I think people should try and avoid using credit cards for many reasons, the least of which is interest payments and carrying a balance. The merchant does have to pay, and yes, the costs are built into the price of goods at the register so as far as a bargaining point, I think it's moot.
In reality, my post is just a sorry ramble and the more we move away from cash the more this sort of stuff will become reality. I don't like it, call me old fashioned.
Sorry for the left turn.
