Bitcoin Forum

since I don't have one, I ask you how much, in detail with source maybe, they are. Because, if, if they were very small, there would be no real reason for average people to use bitcoin. For example I have read that in UE since 2013 fees are 0,2% for debt card and 0,3% for credit card. Which is low. How much in other places?

The costs are often hidden because they are paid by the merchant.  I think in the USA it is customary to pay a small fixed fee, say .29 USD plus a percentage, say 2% of the transaction amount.  As you can see, for many transactions, bitcoin at .0001 btc or .05 USD, is a great deal.  Debit cards are less expensive.

Debit cards are actually more expensive as they use a smaller, less efficient network. Also more data needs to be transmitted when a debit card is used (the customer entering the PIN which is transmitted to the bank in encrypted format, who will reply if it is valid or not). It has been reported that debit card transactions usually cost much more credit card transactions.

International wire transfers from the US range from $25 to $45 per transfer for the banks that I use. This does not include any currency exchamge loss or correspondent bank fees.

Dont be naive. The merchants pays for nothing, since all expenses are added to the price of the product the customer pays. Its allways the customer that pays the price.

yeah, in a hypothetical situation.. if bitcoin were ubiquitous, the retailers that accept them would probably split the savings with the consumer.. so it's actually the consumer that ends up paying.

i guess that's why VISA gives us so much cashback.. we are actually paying more for the product than we should, but that fact is hidden since it's already included with the price. instead, they make us think we are getting good deals on 1% cashback.

So what you're saying, is that paying with cash is a rip off because because you're paying the markup of credit cards, but don't get the benefits of one.

That is a way to interpret the facts, but not what I am saying. If I were to make a suggestion: pay in cash. Less data trail, less fees for the merchants, thus (if enough people do it) possible lower prices.

50 euros per year on "normal" credit card in europe (restricted to 3400 euros per month).
at least 15 euros to emit wire outside eurozone (free in eurozone for wire).

Credit card companies charge anywhere from 0 to 5%, but most of the merchants are in the 1%-3% range.

Bank fees vary a lot, but in the end are based on transfer fees set by different transfer systems. For an end-user that can be from $0.30 to a couple of dollars.

I think all fees are added to the price so they are  not losing much on that.

I wrote a piece on this a month or so ago: http://gendal.wordpress.com/2014/08/09/a-simple-explanation-of-fees-in-the-payment-card-industry/

It's just one example - and note the comments at the bottom:  the breakdown between participants can easily go the other way too.

My piece on the structure of the payment cards industry is here:  http://gendal.wordpress.com/2014/07/05/why-the-payment-card-system-works-the-way-it-does-and-why-bitcoin-isnt-going-to-replace-it-any-time-soon/

http://www.cardhub.com/edu/currency-exchange-study/

http://www.cardhub.com/edu/studies/

http://www.moneysavingexpert.com/travel/overseas-card-charges

http://www.which.co.uk/money/bank-accounts/reviews-ns/bank-accounts/charges-to-use-your-debit-card-abroad/

NOTE this does not include currency conversion spread where they can get u for up to another 5% in worst cases

http://www.thestar.com/business/personal_finance/spending_saving/2012/01/29/beware_foreign_currency_fees_when_travelling.html

re sending money

http://www.theguardian.com/hifx-money-transfers/sending-money-abroad-time-to-ditch-your-bank

This is essentially what happens. Cash customers essentially subsidize people that pay via credit card.

In my home country there is a significant fee to deposit cash into a bank account, as well as a significant risk of theft/robbery, so merchants prefer debit/credit cards as handling cash is too risky. I guess this all depends on where in the world you are.

Debit cards merchant fees are lower because:
- the bank is not exposed to the customer's credit risk. (Not paying their bill)
- the bank is not exposed to the merchant's credit risk. (Not liable if the merchant fails to deliver the goods, or goes bust)
- the bank is not providing extra services such as insurance

If the merchant changes the incorrect amount or if the card was stolen then the bank would need to recover the money from the merchant.

The bank charges interest from the customer to account for their credit risk, this is not reflected in the merchant's cost of accepting a credit card.

Debit card networks are much smaller then credit card networks so they are unable to reach an economy of scale.

Merchants pay transaction fees like 2-3% on the transaction.

But credit companies make miney from issuing credit.  As high as 20-25% APR.

What nobody here ever have a credit card? Lol

As they would with credit cards.

It reflects increased risk for the card issuers, therefore they will attempt to pass that cost on to merchants.

Both Visa and MasterCard process both debit and credit cards.

Can you find any evidence for this claim:
If you mean cost to merchants, that is the opposite of what everybody else says.

http://banking.about.com/od/checkingaccounts/a/debitvscredit.htm

In order to maximize revenue, banks give you an incentive to choose credit (or a penalty for choosing debit, depending on how you look at it). They may charge you a fee for online transactions – usually in the ballpark of one to two dollars. Once you discover these fees, you’re more likely to choose credit next time. In addition, they may offer rewards (such as airline miles or entry into a sweepstakes) each time you choose credit.

http://www.cardfellow.com/blog/interchange-fee/

http://www.cardfellow.com/blog/credit-card-processing-fees/

http://www.bloomberg.com/news/2014-09-04/canada-said-to-be-near-pact-for-lower-credit-card-fees.html

Visa and MasterCard have battled for years with merchants over swipe fees in countries around the world including the U.S. The biggest networks in July lost their bid to dismiss more than 30 lawsuits by retailers including Target Corp. and Macy’s Inc., which are seeking potentially billions of dollars in damages related to fees for processing transactions. Merchants have sued networks for allegedly conspiring with banks to fix swipe fees, which are charged to businesses when consumers pay with credit or debit cards.

:)

As I said, merchant fees for debit cards are lower than for credit cards.

in fact, cash is not free either.

The store does not have any purpose for physical cash.

They can't pay their suppliers with physical cash. (it's too hard to move around physical cash and distribute it to each supplier individually). For that reason they need to bring it to a bank, they often hire security experts to collect the money with armored trucks to bring it to the bank, which is expensive.

Also, having physical cash in your registers increases the risk of armed robbery, which means they have to either take the risk or get insurance. Either way it will be factored in the price. Note that armed robbery not only loses you cash, but also is traumatizing for your crew, so you have to also factor in eventual psychological assistance for your crew if they become traumatized by a robbery.

So while you might THINK cash is ideal and cheap, it's not.

In fact, cash is often more expensive than debit cards (but maybe still less expensive than credit cards, just because credit cards have insane markups)


credit cards are not very popular outside of USA, because people outside of USA are smart enough to know credit cards are expensive and a rip-off.

Absolutely correct that cash costs money..in fact everything costs money and nothing is free...this problem is why all Govenments are moving to digital/electronic currency which they believe will be less expensive. During this process cryptocurrency appeared as a viable further improvement and hopefully that will be the new norm in a short space of time.

One of the major improvements is that cryptocurrency can circumvent the banking system giving access for the un-banked  to e-commerce and electronic payments both of which can save time and money ( and time is money too)

http://www.cnbc.com/id/100661088

At a time when the majority of Americans use online banking, and some even deposit checks using their cellphone cameras, roughly eight percent of America's 115 million households don't have a checking or savings account, according to census data compiled by the FDIC.

Cash costs Americans $200 billion a year

http://www.cnbc.com/id/101103705#.

 The cost of cash is higher for poorer and unbanked Americans.

Someone without a bank account pays an average $3.66 more a month than someone with one.

"Those who are unbanked are four times as likely to pay fees to access their own money. That's a significant difference," Chakravorti said. "A lot of people have the idea that cash is a poor man's best friend. We feel that the poor are actually getting screwed across the board. They're definitely being hurt dealing with cash."

The APR/interest that is charged by banks is to account for the credit risk. The actual returns is not as high because banks generally suffer heavy losses when lending via credit cards.

The actual issue is the price that merchants pay in exchange for having credit card payments processed. You are generally correct as to the percentage, however many merchants will also pay some fixed amount above this percentage.