Re:In Urban China, Cash Is Rapidly Becoming Obsolete
by michaelmrose on Monday July 17, 2017 @01:52AM
(#14785993)
The merchant is charging more to cover the fees. THEN the user often gets 1% or less back in rewards that are both less flexible and less useful than more cash in your pocket.
Re:In Urban China, Cash Is Rapidly Becoming Obsolete
by abalone on Monday July 17, 2017 @10:28AM
(#14788760)
> The merchant is charging more to cover the fees.
This is what everyone assumes, but it turns out it's false. We are fortunate to have some experimental evidence on this. In 2003 Australia slashed interchange fees through regulation. Prices did not decline.
"...retailers saved more than $400 million (Australian) annually in fee revenue after interchange rates there were cut, but there was no evidence that they passed any of the savings on to consumers. Instead, consumers saw higher card fees, a reduction in loyalty benefits, and the introduction of surcharges of up to 3% on credit card transactions, the report found."[1]
[1] http://www.digitaltransactions.net/news/story/Report_-Austra...
Re:In Urban China, Cash Is Rapidly Becoming Obsolete
by muninn_ on Monday July 17, 2017 @07:07AM
(#14787361)
1% or more is a better phrase. Add to that, if the merchant is charging higher fees then you would have to get everybody to collectively stop using credit cards at the same time, or otherwise every time you use cash you're paying extra on your purchase.
Only if you're a merchant. Most of the 2-3% fee is transferred to consumers via reward programs. It's important to understand that merchants and consumers face different incentives and that US card networks have aligned themselves with consumers.