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Author Topic: how much are actually bank fees to pay by credit card or send money?  (Read 1608 times)
murraypaul
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September 11, 2014, 12:40:50 PM
 #21


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In summary, when you’re using a debit card:

Choosing “Credit” makes it an offline transaction
Choosing “Debit” makes it an online transaction
Who Cares?

So far, you may be unimpressed. Who cares how each transaction is processed? You might not, but banks and retailers do. When you do an offline transaction and simply sign a charge slip, the retailer has to pay a small percentage of your total purchase – perhaps 2%. This fee goes to the bank that issued your debit (or credit) card as an interchange fee.

What about online transactions? Retailers can get those done for a lot less. They might only pay 10 cents or so per transaction.

As you might imagine, 2% of every purchase adds up to a lot of money. The banks and credit card companies would love for you to choose credit because they get 2% of every dollar you spend. Retailers, on the other hand, beg to differ. They’d prefer that you choose debit so that they don’t have to pay a hefty interchange fee (but in some states they can add credit card surcharges that pass that fee back to you).

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

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zimmah
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September 11, 2014, 02:50:45 PM
 #22

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.

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)

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

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.
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September 11, 2014, 03:29:12 PM
 #23

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.

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)

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

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."


dankkk
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September 12, 2014, 02:12:39 AM
 #24

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
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.
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