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Comment by will_brown | Hacker News Reader

It’s actually the people who use credit/debit cards to make purchases who raise the prices on all goods/services for people who pay cash.

The average merchant pays 2.3-3.5% per swipe, as a result prices are increased across the board and passed on to consumers, no matter if they pay with card or cash.

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You claim this, but cash has its own costs. Such as running the risk of getting robbed, wrong change (and the retailer losing out), a safe, the costs and time included in physically getting the cash to the bank - either by employees driving it or paying a service to do it. Having enough change on hand can be an issue.

Now, I don't know if all of this equals out to the same as the credit card fees, but it isn't like cash is cost-free.

Cash also has very diffuse benefits. It is anonymous, private, untraceable, and not able to be stolen or compromised without physical access.

And the police will confiscate it for their own use if they find you with a lot of it.

So are prepaid credit cards - the type you do not register. They can theoretically be hacked, but so can your bank account.

And it depends on what you are buying. Most stores have cameras. There are a slew of transactions that require ID as well. You generally need to show some sort of ID to get your cash as well - few employers will pay in cash. Major cash purchases are sometimes either refused or require ID and forms to finish.

And you are simply out of luck if you happen to lose it somehow. It can get damaged to the point of being worthless as well.

Here in the UK, most banks charge business account holders about 1% when they deposit or withdraw cash. Add in the labour costs of cash handling, the risks associated with cash on the premises and (in many cases) the costs of a secure cash-in-transit service and it's potentially more expensive to take cash than cards.

Multiple studies have found that customers are more willing to spend and typically spend more per transaction when using cards rather than cash, so the merchant charge is usually a sound investment by the retailer.

Is this true? Cash management has a definite cost, but it is just an assumed cost of doing business.

My friend, who owns a very cash heavy retail business, tells me that he pays the company that regularly picks up cash much, much less than what the credit card processors charge.

And in the Eu card issuers have been raising prices to defeat the recent clampdown on interchange fees which cost me almost £20 a month due to loss of rebates.

Then again they can offset these costs by having a much larger customer base (i.e. people without cash on them) from which to help them realize greater volume discounts.

Fair enough. But it doesn't follow that we should increase prices further by rounding up (as per the comment I responded to) because credit cards charge a fee.

It's actually Americans who raised price to serve Americans. In sane countries, the merchant fees are half of that.

Those costs have been driven down by Stripe and cash isn’t without its own costs. I used to favor cash myself but a couple of local businesses here recently started requesting credit cards because it’s cheaper than dealing with counterfeiting.

Stripe costs 2.9% + 30¢.

Merchant accounts have long been below that, they were just a pain to get, and generally required hardware from the bank.

Merchant accounts weren’t that low until they started getting more competition.

I had clients in the early 2000s with 1.9% rates, as well as one with 2.5% and no fixed per-transaction fee, and these were small mom-and-pop businesses - the Targets, Costcos, Apples, etc. of the world likely go way lower on volume.

Stripe's selling point was never low fees. It was "you can be up and accepting cards in just a few minutes of coding", and that was well worth paying an extra percent or so.

You both can be right at the same time.

CNP transactions (which stripe does) cost bit higher than CP transactions which require POS machine at mom/pop shops.

That’s probably it: I never had a client who saw rates that low but these were also online sales with presumably higher fraud risk

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