Second thing: interchange fees are not the only fees that your typical store has to pay, the total fees are much higher. I think the EU essentially capped Visa/Mastercard profit in the EU, more than they capped small business fees for card payment.
Second thing: interchange fees are not the only fees that your typical store has to pay, the total fees are much higher. I think the EU essentially capped Visa/Mastercard profit in the EU, more than they capped small business fees for card payment.
If 1% is huge, that's a lot better. 2% cashback is my baseline for normal in the US and I currently use a 4% on everything card (no longer available for new customers).
I don't like the cashback system, but the economics insist I use it while it's available.
We're a business in the UK and the charges for accepting Business credit cards is much higher.
I don't have current charges to hand, but in 2023 Personal Credit Cards were 1.97% whilst for Business Credit Cards we were charged 3.43%. That's probably how they afford such high cashback/loyalty schemes.
I think we're paying about half those rates now. I know Amex is somewhere between Personal and Business charges.
Although we are a B2B business, most of our card transactions are from business owners personal cards so it's not really an issue. We occasionally monitor the split and if it became significant we'd need to look at addressing it, probably by increasing prices for those customers.