Re:Stripe to move to South San Francisco
by nitrogen on Thursday October 24, 2019 @04:23AM
(#21342653)
Again, issuer costs have no bearing on Merchant fees nor the profitability of processors.
If this is true, then where does the cash back come from if not as a cut of the merchant fees?
Re:Stripe to move to South San Francisco
by AdieuToLogic on Thursday October 24, 2019 @11:03AM
(#21345347)
> > Again, issuer costs have no bearing on Merchant fees nor the profitability of processors.
> If this is true, then where does the cash back come from if not as a cut of the merchant fees?
Interest rates + membership fees charged by issuers to Card Holders.
Re:Stripe to move to South San Francisco
by rstupek on Thursday October 24, 2019 @01:01PM
(#21346581)
I don't think that is correct. Merchants are charged different rates based on the cash back rates of a given card. Merchants have to eat most of that cash back being given to the card holders.
Re:Stripe to move to South San Francisco
by ceejayoz on Thursday October 24, 2019 @08:26AM
(#21343932)
Interchange fees are higher on premium (rewards) cards. The merchant may contractually pay a fixed percentage that accounts for the expected mix of cards, but those rewards absolutely come from merchant fees.
While often the same bank performs, or is a partial owner involved in, both processing and issuing, the percentages you quote are largely disjoint.
> I'm reading that Visa typically charges 2.3% to merchants ...
The Discount Rate[0] a Merchant pays varies significantly based on the line-of-business, charge-backs, processing contract, and a bunch of other things.
> ... at least on average 1% of each transaction goes to cardholder bonuses ...
Again, issuer costs have no bearing on Merchant fees nor the profitability of processors.
0 - https://www.creditcards.com/credit-card-news/glossary/term-d...