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Author Topic: how much are actually bank fees to pay by credit card or send money?  (Read 1608 times)
Impros88
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September 08, 2014, 09:22:15 PM
 #1

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?
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September 08, 2014, 09:54:44 PM
 #2

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.
leannemckim46
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September 08, 2014, 11:19:15 PM
 #3

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.

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Soros Shorts
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September 08, 2014, 11:28:46 PM
 #4

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.
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September 09, 2014, 07:12:02 AM
 #5

The costs are often hidden because they are paid by the merchant.  -snip-

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.
beetcoin
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September 09, 2014, 07:22:54 AM
 #6

The costs are often hidden because they are paid by the merchant.  -snip-

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.
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September 09, 2014, 07:30:17 AM
 #7

The costs are often hidden because they are paid by the merchant.  -snip-

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.

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.

shorena
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September 09, 2014, 08:50:13 AM
 #8

-snip-

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.
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September 09, 2014, 10:25:17 AM
 #9

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).
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September 09, 2014, 10:43:06 AM
 #10

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.
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September 09, 2014, 10:50:33 AM
 #11

I think all fees are added to the price so they are  not losing much on that.
gendal
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September 09, 2014, 11:00:37 AM
 #12

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/
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September 09, 2014, 12:39:01 PM
Last edit: September 09, 2014, 01:22:01 PM by qwerty555
 #13


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



leannemckim46
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September 10, 2014, 02:48:03 AM
 #14

The costs are often hidden because they are paid by the merchant.  -snip-

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.

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

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CliveK
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September 10, 2014, 09:44:36 AM
 #15

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.
murraypaul
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September 10, 2014, 09:53:35 AM
 #16

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.

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

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leannemckim46
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September 10, 2014, 11:26:45 PM
 #17

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.

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.

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twiifm
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September 11, 2014, 01:08:57 AM
 #18

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
murraypaul
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September 11, 2014, 09:41:11 AM
 #19

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.

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.
As they would with credit cards.

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

Quote
Debit card networks are much smaller then credit card networks so they are unable to reach an economy of scale.
Both Visa and MasterCard process both debit and credit cards.

Can you find any evidence for this claim:
Quote
It has been reported that debit card transactions usually cost much more credit card transactions.
If you mean cost to merchants, that is the opposite of what everybody else says.


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qwerty555
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September 11, 2014, 11:07:10 AM
 #20



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.

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