Large merchants also pay much less for interchange generally.

Small merchants negotiate with Stripe for a flat fee to accept all cards. Big merchants negotiate with the networks and pay varying prices for varying rewards amounts (or however they get the deal structured).

Interestingly my flat fee with stripe is less than my reward rate on my credit card for some categories. It obviously is against the contract terms and probably considered fraud but I could theoretically make about 1.4-3 cents on the dollar (depending how you value points) by charging myself money.

This comes up in the article.

kinda, the article mentions that certain cards allow you on certain categories to get more than the interchange rate. what they don't mention in the article is that square charges the same fee to the business whatever kind of card is used, in this case whenever you use an amex card it's less profitable for square. If i were using a more traditional processor they may pass this cost on to me.

also milage reward points can hit as high as 2.3 cents per dollar so assuming i want to fly to japan with ANA i could in theory get 8.6c in value of MR points per 2.6c i charge myself. However i would not expect to get away with this and i'm sure square would figure this out.

He also mentions the possibility of adversarial collaboration, creating a scenario similar to yours…

If only Walmart would take contactless payments.

It has more to do with making Walmart Pay the only contactless option to drive adoption of their mobile app.

I confess that I don't understand what the big deal is. It takes 5 seconds to slide the card into the machine. Personally, I find fumbling with my phone takes longer as does figuring out where the reader wants to tap the card if I'm not familiar with that particular store's system.

> It takes 5 seconds to slide the card into the machine.

It sure does, and then 45 seconds while the machine ... thinks about life, and then 15 seconds for it to say "chip read error, reinsert card" and then another 45 seconds for it to reconsider the nature of reality, and then listening to a fire alarm sound that they chose for the success alarm. Excellent UX, no notes

The best is how they flash different phrasings and formattings of "do not remove card" just to make sure you're paying attention. I used to slide the card until recently when it became disallowed, that was a way better UX.

I use it on my watch. Double click the side button even when my watch is under a jacket and just hold it in the vicinity of the reader. It’s very easy once you get used to it.

> Personally, I find fumbling with my phone takes longer as does figuring out where the reader wants to tap the card if I'm not familiar with that particular store's system.

Aren't both of these just symptoms of unfamiliarity with the tech?

I resisted phone payments for a while, until one day I forgot my wallet and quickly added a few cards to my phone. Now I'm severely tempted to use it more often—my phone has a wallet button on the lock screen that jumps me straight there ready to pay with my default card. I've definitely experienced some friction the two times I've used it, but it seems pretty clear that that friction is temporary while I'm still becoming familiar with it.

The difference is the tap to pay location is usually not obvious, and FaceID will fail sometimes.

One of many reasons why I still have a TouchID iOS device, and am praying Apple will continue to make them.

I'd still have one too, but certain circumstances forced me to get something else. The home button iPhones are better.

Even then, I can tap with the card, which tends to register faster than inserting too. No garbage proprietary software required to be installed on my phone, and I still get contactless.

> I don't understand what the big deal is. It takes 5 seconds to slide the card into the machine

For most people, there's the time to get their wallet or equivalent out of pockets or purses, fiddle to get the card, put it the correct way and swipe (but not too fast or too slow!). Vs a phone/watch tap which is usually much more convenient.

I guess it's what you're used to. I have a small wallet I carry in a front pocket, haven't had to swipe a card in ages, and it takes 5 seconds to insert the card.

Maybe if I wore my Apple Watch more, I'd get used to using it but the card just seems more straightforward in general. Maybe I'll insert and maybe I'll tap. I'm pretty indifferent.

It would take me just as long to get my phone out of my pocket as it would to get my wallet out. Plus a lot of machines have tap pay now if your card supports it.

But you then have to open your wallet, and slide the card out. With the phone, if it's out, it's unlocked and ready to be tapped.

It's not unlocked until you unlock it. The only reason the phone is more convenient for some people is because they're playing on it while waiting in line.

I like contactless just because for some reason, my cards always get beat up and the chips become problematic on my cards after about a year. They just sit in my wallet. But half the time I go to pay with my card, I have to dip twice because the first time, the chip reader always says it is unable to read the chip.

I've also had issues at Walmart where I know some lanes to flat out avoid because the chip readers will always reject my card for unable to read the chip. With my phone, this isn't an issue. Even if I get a new card, wait 8-12 months and its the same problem again.

You can do contactless on your card.

If your bank issues you a card with it. I got a new card about 6 months ago, doesn't support contactless.

But I am aware that the cards exist and I am not opposed to it. With contactless I am fine with it being on my phone or card. But I gotta have a card that has contactless to be able to use it.

are cards that dont have paywave or whatever really that common in the US? my bank cards have both had it

I'm in the US and I'm pretty sure all 5 (6? IDR) of my credit cards have supported tap-to-pay for a couple years now.

Most of my cards don't have it currently. Some do. I saw the new version of one bank's cards with it so I think when those expires or gets replaced it'll have contactless. Then it'll be about half of my cards without it.

I have over 10 cards, debit and credit, and I think only one or two don't support it.

I think most banks, but some banks are still slow to roll out. Also, having a contactless card right now wouldn't help my problem at the local Walmart. They have a bunch of old Ingenico devices that don't support tap to pay anyways. So even if my currently troublesome card had tap to pay, it wouldn't do me any good at my local Walmart. Otherwise, I'd just use Apple pay. Most card readers that support tap on a card also support Apple pay and Google Pay and all the other NFC pays (I think Samsung has their own?).

Also at my current job, I am the WorldPay guy. I work at a point of sale company and my area of ownership is integration into World Pay for payment processing at brick and mortar stores. None of our clients have tap to pay devices. They are all running 15 year old Ingenicos and plan to run them till they stop working. So as of right now, that is at least 2,500 stores in the US that I know of that don't support any kind of contactless payments.

You know what would be more durable - a 4'' solid aluminum emv chip shaped coaster. Check us out at aluminum.finance pw 'aluminum' and let me know what you think!

It means you've got to take the card with you.

I use Walmart pay with their app. But then again we’ve totally given up buying off Amazon and do grocery pickup or delivery from Walmart. For 90% of items this is faster than we’d get it from Amazon.

Some of it may be that if I'm in a store, I've almost certainly driven there so I probably have my (small) wallet with me.

How often do you find yourself somewhere with your phone but not your wallet?

I always have my phone in my pocket. My billfold is stored in my car, and I do occasionally forget to put it in my pocket when going in to a store. Plus my billfold is thicker than my phone so it's less fun to store in a pocket.

I think this is very region specific. I'm in the UK and hardly ever take my wallet with me unless I'm going somewhere that I know to be cash only and might need to find a cash machine. Only other time I do take my wallet is when I'm in Germany where most places seem to dislike cards.

Same, and I note that the OVERWHELMING majority of other customers that I see at the grocery store or Target are still inserting plastic credit cards into the readers (I do think swiping is going extinct though, as the readers push you to insert instead).

However, this is HN and not at all typical of the U.S. or world overall. Even though we frequently lose sight of that.

I often leave the house without even my wallet these days. With my phone being my car key and my wallet and my transit pass, there's little reason to carry anything else.

I realized while waiting in line why Apple Pay makes sense to some people but not me: They're all on their phones in line, I'm not. So for them, it's a cc in pocket vs a phone already in hand.

Presumably they do not because they want to track you via your credit card number, and permitting Apple Pay (maybe others too) would hinder that.

It's more that they want to try and convince people to pay with Walmart's own lower-cost (to them) app if you want to do contactless payments from your phone. If they made it easier to use Apple Pay, why would anyone ever use their app?

Why would paying with the Walmart app be lower cost to Walmart? Both the Walmart app and Apple Pay are essentially, as far as payments go, just digital wallets that you can store credit card information in.

When you use them it is still a charge to one of those credit cards.

It might actually cost Walmart more in my case, because the card I have on file has larger rewards for online purchases than it does for in-store purchases, and the Walmart app processes purchases as online even when made in-store. If I pay with the physical card it is processed as in-store.

Apple Pay is just as traceable if they want it to be.

They’re just stubborn and want people to use their option (and card, if possible).

As it is you can load any credit card into the Walmart app and pay by pointing the “check price” barcode camera at the screen.

> Apple Pay is just as traceable if they want it to be.

[Citation Needed].

On the other hand, stores like that probably already do facial recognition on customers, so it really is just intransigence to not allow contactless payments.

Apple Pay and Google Pay have their own virtual numbers, rather than using your regular card number, but the number doesn't rotate.

For example, our local bus company can quite happily offer capped daily and weekly fares when folk use the same device to pay.

Your local bus company isn't trying to correlate your activity across multiple retailers to try to squeeze an extra few cents of value from you, though.

The device account number does not rotate with every transaction. You have to unlink your device from your credit account and re-enroll to do that.

See https://birchtree.me/blog/digital-wallets-and-the-only-apple... - the DPAN stays the same at a particular merchant, so Walmart sees all but can't necessarily directly "know" what you're buying at other stores.

I presume the same.

I always rate my experience 1 star when checking out at Walmart because of this. Probably won't change anything, but I feel I can't just stop going to Walmart because then Amazon is the only place left. Which is also fucked up but let's stay on topic.

This is actually the reason lower fee cards exist. If every card had a 5% transaction cost no merchant would sign up for that card brand. If the merchant is convinced their average transaction cost will be lower because some of the cards will be cheaper you can get away with some expensive cards.

And this is why many small businesses in my area don't accept American Express cards full stop. Some don't even accept Discover.

This is interestingly regional: in the part of NJ where I live, every small business has an Amex "shop local" sticker on their front window

AmEx has worked hard to keep their home turf around New York City friendly to their cards.

They did this campaign in Sydney a while back.

Used to be every year, Amex in Canada would run a "Shop Local" promo where you'd get $5 back on a transaction over $10 at smaller places x5 in a month, and let you look up who's a part of the program on a map.

Then you'd visit a lot of them and they'd claim to not accept Amex!

Here in Europe I see AE accepted only for digital goods, high margin stuff or international (read American)chains

American Express has really targeted the French market, there are all sorts of small stores (like bakeries, pharmacies (not American pharmacies - only medicine and very closely related stuff like creams and diapers) and similar size) with proud "Amex accepted here" signs. There was even an Amex program a few years back giving 5euros back on transactions of more than 20 euros in small shops like that.

I thought(maybe ignorantly) that a lot of merchants didn’t like Amex because it was so easy for customers to dispute transactions.

This wouldn't surprise me, given that Amex does have a consumer reputation for being very friendly for disputes. That factors in two ways: a successful dispute means that the merchant is completely out that money, and every dispute also costs something like $25 to handle regardless of whether the merchant ultimately wins or loses.

It's much easier just to model this as an additional merchant "fee." If a card tends to dump fraud liability onto the merchant (and here we're talking about fraud that the merchant really isn't in a position to prevent, but the card issuer/network might be) then this simply increases the cost born by the merchant who accepts the card. Of course it's extremely difficult to estimate these costs, which is probably a desirable feature for card issuers/networks, since lack of price transparency is usually helpful if one wishes to overcharge for things.

Ironically this may have been true at one time but Amex is now one of the best card providers to deal with as a merchant as they have a very clear and transparent dispute and then appeals process. Visa/Chase seem to be impossible to win.

Are they bound by contract not to offer a discount for casher buyers?

I ask because when I was in Germany (and, granted, this was a few decades ago) you got some percent off the price if you paid cash. Merchants there seemed pretty credit-card averse.

They used to be but the law was changed to make it illegal for the card companies to demand that they don’t offer a cash discount (or charge more for credit). Smaller businesses are doing that more and more since the pandemic to try to hold to their prices as long as they can.

Big companies do a similar thing by offering you a store card. Costco likely makes more money from you when you pay with your Costco card than if you pay cash, because they get the interchange fee very very low and have to pay to handle cash. Rumor was AMEX was eating the interchange fee AND paying them … because they more than made it up by the customers who made the card Top Card.

In the EU, the opposite of this happened: the EU directive PSD2 made it illegal for merchants to apply surcharges on purchases using consumer credit and debit cards from early 2018.

I thought this was a UK govt being stupid thing. So it was the EU to blame!

Given what this article says, it sounds as though not only are cash buyers cross-subsidising card buyers, but non-rewards card buyers are cross subsidising rewards card buyers.

So much for free markets.

I'm told cash is actually more troublesome for merchants than electronic means, especially as more transactions become cashless. They have to pay for keeping change, physical security, transport of takings, bank cash processing fees, etc. Given the EU/UK caps electronic interchange fees to something reasonable, it may even be card buyers are cross-subsidizing cash buyers in some businesses.

That's still a thing in Canada and the US in various places, generally "mom and pop" run business.

Credit card fees for small orgs are like 1-2% so for a small biz that could pinch. Cash also lets you, uh, "fudge" your numbers for tax purposes.

There's a good sushi place near me that gives a 10% discount for cash. I'm fascinated by this.

(I still use a card because life is short)

Unrecorded cash payment makes it much easier to pay undocumented staff

That may just be good old-fashioned tax evasion.

(If you pay cash, the business owner can just pocket the money without ever recording the transaction. For digital payments, this is much harder to do undetected.)

It's tax evasion.

First comment I see that addresses this. This is a big part of accepting and paying cash. Tax evation. From both sides.

Yeah I often see small print on the fuel cost per gallon as "cash price" .. I assume this happens mostly on low-margin products.

Where I live there's a mom and pop (well, mom and daughter) shop that sells relatively expensive clothes. They stopped accepting Amex because fees were too high, yet they basically apply a 5-10% discount by default if you spend enough...

All the CC contracts I have ever seen only prevented you from discriminating against a particular card/brand if you took credit cards. You could offer a cash discount as a policy, but you couldn't charge AMEX holders an extra 1%, as an example.

They used to but got sued over it, and in 2012 settled it partially by ending the practice: https://www.barclaydamon.com/alerts/What-the-Credit-Card-Set...

They can do it now. In the past you had to offer same prices, although you could negotiate.

It’s usually motivated more by mom and pops skimming taxes than 3% credit card fees. If you do any kind of volume, there isn’t a ton of savings as cash management ain’t free.

The electronic equivalent is people who take personal Venmo at retail.

Where I live it'd used to be possible to get a discount if you paid cash but it was deemed discriminatory against card holders and so it was banned. It's the same price regardless of payment method.

It removes the incentive for clients to use cash if a card option is available, makes them more used to paying by card, and hence decreases the competitiveness of merchants that don't offer card at all - until cards become so wide spread that many merchants don't even accept cash at all, like where I live.

A bit hostile towards merchants, but very nice for consumers imo.

> A bit hostile towards merchants, but very nice for consumers imo.

It's nice for consumers who prefer to pay by card. It's hostile towards consumers who prefer to pay in cash.

Call me close minded but i see cash as an archaic, strictly inferior way of managing money. But to each their own.

I spend primarily on credit cards but I still think it’s important to preserve the ability to transact without the government knowing. Privacy is best preserved when data is not created at all, rather than when data is protected by law.

Which is the reason the cut is now capped and card acceptance is higher, even for credit cards (0.3% for cc, 0.2% for dc). Though low-margin businesses like grocery store still don't accept them (credit cards) due to the marginally higher fees in some countries.

It's pretty expensive to take cash. First, you have to keep a float of money for change. Then you have to secure the cash until you deposit it in the bank. Then sink some time into counting and depositing it, before being charged by your bank for depositing cash. That must very quickly add up to a percentage point or 2.

The issue is that these costs of handling cash are largely fixed - marginally, if your store takes $100 in cash, your cash-handling expenses and effort stay the same, but if you take $100 by card, your fees directly increase. You avoid the expenses of handling cash only if you don't take cash at all.

What I want to do is pass on the exact processing fee to my customers, then they can choose their payment method based on how much it is going to cost them. I might then choose to cover a portion of the fee for electronic transactions, because they mean I save money vs processing cash. But the customer would pay the excess.

I would need a system that can display to the customer what fee they would be charged with their selected payment method, and be given an option to switch to a less expensive payment method.

It's already impossible in the USA to know what you're going to pay for something until you get to the checkout line. This just makes it worse.

Why not go even further? Itemize the marginal cost of maintaining your property's parking lot for those customers who visit your business by car? Charge customers a "store heating fee" in the winter? Customer support fee if they talk to anyone? Just as ridiculous. Processing credit cards is just one of many costs of doing business that you need to account for when you price your products.

I can give discounts to customers however I want to, thank you. As long as the customer knows what card they are going to use, they know exactly what the cost will be. I am all for posting sales tax rates as well as any transaction processing fees at the door, too, though.

No thanks, I’m just gonna go to the grocery store down the street where they don’t make me do linear algebra just to buy a box of Froot Loops.

I'm guessing you never eat at any restaurants either since calculating a percentage is about as hard as linear algebra for you?

Everything else being equal, given the choice between a restaurant that makes me calculate a tip and one that just puts a single price on the menu with no tip required or expected, I’m going for the simpler option. One less thing I have to worry about.

Besides, I honestly would be sort of annoyed that you insist on making your dissatisfaction with your credit card processor my problem as a customer. I have my own problems to worry about, don’t make my saving 1-4% on groceries vs. 2-3% cash back on my credit card another thing I have to deal with. I’ve stopped shopping at certain grocery stores over less.

You don't have to do the math, they do it for you

There's a local restaurant that has a 3% CC surcharge and a 10% cash discount. I like going there and paying cash.

> Itemize the marginal cost of maintaining your property's parking lot for those customers who visit your business by car

This isn't that uncommon, quite a few places in Europe do this actually.

Usually there's a barrier at the parking lot entrance. You get a ticket when entering, which you then have to put in a machine when leaving. The machine calculates your fee based on how long your car was parked. Modern systems are far more automated and use license plate readers instead.

Those parking lots are not owned by the stores. It's usually by the city or some other property investor.

If it happens to be a store-owned parking that charges per hour, it's to prevent abuse from drivers going to other stores nearby if it's in downtown. Charging for parking outside your store in a less dense district is equal to putting up a sign that you don't want customers.

> Why not go even further? Itemize the marginal cost of maintaining your property's parking lot for those customers who visit your business by car?

Aka... charge for parking? I mean? This is pretty common? I've always found it annoying that stores will validate parking for motorists but if I choose to take public transit or bikeshare, I don't get any corresponding debate.

They eliminates your ability to advertise prices honestly, without overwhelming your customers with detail that will distract them.

... So just like US sales tax already does? I'm not saying it's a good system, but I'm already paying some random amount on top of the sticker price for everything I buy, depending on what state, county, and city I'm in at the time.

I will clearly state which payment methods are free and which ones the customer will pay a conveniance fee or recieve a discount if they use. I will clearly show the customer at checkout what their total is with their chosen payment and shipping (if applicable) options would be, and give them the opportunity to change their selection. It is about customer choice and convenience. You are welcome to shop somewhere else that bundles these expenses into the price of the item and givea you no choice in avoiding them.

I can only speak for me, but if I have to do that much mental math to figure out the best options to pay or see a bunch of random (to me) fees and adjustments at checkout, I'm leaving and going somewhere else. It feels scammy even if your goals are noble.

If the sign said you pay 5% for AmEx, 4% for Visa and 0% for cash, you don't have to do any arithmetic to see which number is smaller.

What's the fee for counterfeit cash? Or illegally gained cash?

What's the fee for cash the requires quite a bit of change? What's the fee for cash that is composed of very small values (e.g. quarters and dimes for a tv)?

It's interesting that all of these complications are ignored entirely when pricing payment methods. Handling cash isn't free and carries risk.

> What's the fee for counterfeit cash? Or illegally gained cash?

What's the fee for credit card chargebacks from stolen cards, or chargeback fraud from customers who receive a product and then dispute the charge anyway?

> What's the fee for cash the requires quite a bit of change?

There are machines that count coins and issue exact change. If you do a lot of cash business, you buy one. For example, the self-checkout machines at Walmart do this.

The largest denomination still issued for US cash is $100, so no cash transaction will require more change than this, and some merchants don't accept large bills for small transactions.

> What's the fee for cash that is composed of very small values (e.g. quarters and dimes for a tv)?

How often do you think that actually happens?

Also, how are costs like this to be avoided unless you stop accepting cash whatsoever, and thereby lose business? Just eating the credit card fees instead of passing them on isn't going to stop someone with a jug full of nickels from wanting to spend them.

> Handling cash isn't free and carries risk.

Nothing is free. How about the time value of money for the time it takes for the credit card companies to pay you, as opposed to cash which you can immediately spend or deposit and begin collecting interest on?

The issue is that credit card companies have the usual set of costs and then on top of that charge significant transaction fees and shift the cost of various types of fraud to the merchant even though they're the ones who designed the system that makes it easy to carry out.

Or just make your prices have the credit card fees built in just like normal businesses. Your system is a ton of work for very little benefit to anyone and it’s probably lowering your revenue and it’s as annoying as places that charge for takeout containers — missing the point that takeout containers encourage people to buy more food.

It’s an unsophisticated approach to business. That’s why it’s common in mom and pop places — mom didn’t go to business school and pop is tripping over dollars to save a nickle — they see the “expense” but they can’t see the revenue that aren’t getting.

There is a reason most small restaurants fail — they don’t know how to be more profitable. So they start to add on these little fees when they begin to struggle and don’t realize that they’re making the problem worse. In other words, most people that start restaurants don’t know what they’re doing in the back office even if they’re great in the kitchen. Restaurants fail for many reasons, but not controlling costs is the biggest — however, they’re naïvely choosing to control the wrong costs.

One of my good friends owns a chain of 30 Tex-Mex restaurants in Texas. After several burglaries of the safe at several locations, they went cashless at some locations. The cashless locations, without exception, saw sales increase by over 12%. He quickly made all of his stores cashless and sales increased among all stores. My anecdote isn’t data — but there is plenty of data out there.

The credit card surcharge scheme is endemic among small business owners who actually haven’t done the math. Or, more accurately, they’re doing the wrong math.

Credit card users spend more than cash users. So you make up for the “savings” with lower sales volume. And credit card users that have to pay higher prices will go elsewhere. Or, if they pull out cash, they’ll spend less of it.

https://www.nature.com/articles/s41598-021-83488-3

> Your system is a ton of work for very little benefit to anyone

It has the obvious benefit of discouraging people from increasing your costs with rewards cards. Keep in mind that businesses often have net margins in the vicinity of 5% of revenue. Paying 3% of revenue or more to the credit card company is heinous.

And what work is there to do? The calculation is done by a computer. If your attitude is "just price in the cost" well then there you go, you can pay the true cost of the card you have without even looking at the alternatives. Whereas if you want to get the lowest price then you have to figure out which card has the lowest price. Removing your option to do this is not going to save you money, it's just going to cause you to pay the higher price at all times, which you still have the choice to do.

> they see the “expense” but they can’t see the revenue that aren’t getting.

Increasing sales by e.g. 15% while decreasing net profit by up to 60% is often not a fantastic business decision.

> Credit card users spend more than cash users.

Which is why you accept them but provide a discount for the people who don't use them and thereby don't expose you to their fees.

> And credit card users that have to pay higher prices will go elsewhere.

But they're not higher prices. Restaurant A charges however much to everyone. Restaurant B charges exactly the same amount to people who use credit cards and a few percent less to people who pay cash. The people who insist on using credit cards can go to either place and pay the same amount, anyone willing to pay cash can get a discount at Restaurant B.

Extra fees of any kind just really, really annoy people. This is true at restaurants but also plenty of other industries. In the majority of cases, the loss of business from patrons who avoid your establishment due to the extra fees outweighs the revenue generated by the fee. Of course, you are welcome to test out your theories, but you're unlikely to find many people who predict they will be successful.

I'd like to believe this is true but in my metropolitan area, it's quite common to see e.g. a covid recovery fee, inflation recovery fee, iniative 82 service fee, and autograt when you are checking out. It's extremely bad for price transparency but the practice seems very popular among merchants who are betting that customers will still show up as long as the menu prices appear low.

And do you go to these restaurants just as often as you did in the past? Or have you reduced your patronage?

Overall, I eat out less, but "drink out" more and never get more than one drink at the establishment. I can't claim to be able to uniquely isolate any of my behavior to fees because a lot has changed in my life. Before covid I was a student and now an FTE, I was shy and lonely and now I have an active social life, I lived in a very big city and now live in a big city, but I can tell you I get an ick about going out, and when I'm proposing to go out I am mindful of costs and fees and propose places that I consider to be cheaper and more forthright about pricing.

The only real question here is if it's to your advantage to advertise a lower price and then tack on a credit card processing fee or advertise a higher price and then provide a discount for cash/bank transfers.

The first gives you a lower advertised price but then irks customers when they find out about the extra charge. The second gives you a higher advertised price, which could be worse depending on the nature of the business.

But the proposed alternative where you charge the same to everybody and incorporate it into the advertised price requires you to use the higher advertised price, which has no advantage over the second option regardless of whether or not the second option is better than the first.

Restaurants, which is what your post is about, rarely advertise specific prices. Part of that is because a restaurant bill is comprised of multiple components -- entree, appetizer, dessert, beverage, "extras". Another part is that menus typically have dozens of options, another is that prices change often, and another is that many restaurants are local businesses with limited or no advertising budget. And a huge one is that restaurants that do promote low prices are often considered low quality as well.

In other words your point is pretty much moot because nobody is choosing a restaurant based on, veal parmigiana costs $25 at Villa Roma and $24.50 at Sicily Palace. But they very much might remember that Sicily Palace charges a credit card fee and boycott it in favor of somewhere else.

I'm curious if banning cash is profitable because when the business is at capacity, the no cash business filters out thriftier consumers, and not because an individual (who has both cash and credit) spends more when they are told cash is not accepted.

No payment methods are free...

Some donation platforms do this! They show and add on the processing fee for VISA/MC and Amex separately, and Amex is a little higher.

Do they account for the different interchange rates on different classes of cards within a processing network? Not every merchant will want to be that granular, but I think it is worth it for big ticket items.

I don't think most merchants have the option to be that granular. I believe that most payment processors only provide a simplified view of interchange rates (and other fees) to all but very large merchants.

For example Braintree is 2.59% + $0.49/transaction, plus 1% if non-USD and 1% if the card was issued outside the US.

They used to split transactions into two tiers, based on how much the actual interchange and other fees were, and you monthly bill as a merchant would show charges for each tier. Within each tier the charge to the merchant was a fixed percentage and a fixed transaction fee. There was no good way for the merchant to know ahead of time which tier a given charge would fall under, although they could guess that a high rewards card was more likely to fall into the higher fee tier.

They should A/B test this. My theory is that this creates some amount of friction. I was all set to donate $100, but now I have to go find my debit card or figure out some bank transfer nonsense and by the time I get back (if I get back) my motivation to donate has diminished.

Donation platforms ought to do some analytics on this. If I’m giving money, I want it to be simple without requiring me to second guess.

If a donation platform takes Apple Pay, the friction is even less. I don’t want to fill out your stupid long form, create a password, share my address or whatever.

But, I’m one person — this might be an interesting Masters thesis topic to study the behavioral economics of donation platforms.

What I've personally seen is a checkbox, you put in your donation amount and then you can check/uncheck "cover processing fees."

Found an example - https://donorbox.org/nonprofit-blog/donors-to-cover-processi...

Do you actually want to do that? When a customer wants to make a purchase, I think it is best to get the hell out of their way and not go stand between their wallet and your wallet, blocking their money and yapping about fees or some other completely unimportant stuff.

Can't you just print up a sign for this?

I've seen signs that say stuff like "Prices listed are for cash, 3% surcharge for credit cards."

How many different fee tiers are you as a retailer really trying to charge?

I think there's some technical reason you can't do this, because even gas stations don't. They just have a separate cash/credit price.

Ahhh yeees, the Ryanair strategy. Everyone's absolute favorite airline.

How do i know you are being transparent with the surcharge? What if you add 2% for a card payment when your actual overhead is only 1%. I suspect this is the reason why EU made these type of schemes illegal many years back. It just creates bad incentives for stores to add random fees everywhere.

How do you even calculate the processing fee of cash on a single transaction? A lot of comment here seem to assume cash is free, when in fact you need a safe, take time to go to the bank, security transfers, counting it, and so on.

That just seems like an irrational amount of energy to spend on 1-3%. I guess you’d get a lot of payments nerds?

That would cause a massive customer support and frustration problem as regular customers don't know or care how their card is classified and would complaint that it doesn't work. This would affect both the merchant and the issuer negatively.