> The business doesn't lose 3 percent of revenue, because it also saves money not dealing with cash:
Debit cards circumvents the need for cash as well and are much cheaper. Everyone uses debit cards where I live, cash is very rare so companies doesn't need to deal with it much.
So the difference is really just a straight 3% vs 0.15% with no other consequences.
I think 3% is an exaggeration. And in fact, you can get 2% cash back. I don't think there's very much being charged when all is said and done.
This seems to show the fees can be considerably less than 3%, although PayPal or Square will charge nearly that:
https://www.fool.com/the-ascent/research/average-credit-card...
https://www.mastercard.us/en-us/business/overview/support/me...
That's an interesting point. I'm not aware of any POS payment processor used by business that accepts debit cards but not credit cards. Not sure why that is.
The business doesn't lose 3 percent of revenue, because it also saves money not dealing with cash:
- eliminates cash theft - always a chronic problem for business.
- reduces costs of transporting/dealing with cash
- improves bookkeeping and paper work
and it gains revenue by dealing with people who don't use cash. A large number of customers don't make routine purchases with cash, and these are higher income customers.
So the choice isn't "pay 3% on X or don't pay 3% of X" The choice is "pay 3% on X" or "don't pay 3% on .9X".