Hacker News Reader

Comment by zamadatix | Hacker News Reader

Then wouldn't it make more sense to roll this into the main price so the main price seems higher rather than lower?

The common example is Mastercard and Visa. They charge a fee to the merchant but they require that that the merchant cannot offer you a lower price to pay some other way to avoid the fee. On top of that, there are 2 fees, one for "regular cards" and one for "premium cards" (gold cards, platinum cards). They charge the merchant more when a user uses a premium card but they require the merchant not to tell you.

In an ideal world (well, my ideal world), these fees would be called out so that you, the customer, could choose not to pay them. You might see, "if I pay cash this $100 product will cost $100 but if pay with my platinum card it's $105. I can save $5 by paying cash".

Mastercard and Visa forbid this for two reasons: (1) they don't want you choose the cheaper cash option (2) they don't want a competitor to be able to offer a lower fee. In the example above, they charge $5 but a competitor could charge $1. You'd might pick the cheaper option but you're unaware of it since they forbid the merchant from offering.

They can only do this because they effectively have a duopoly on the market. Don't play by their rules, lose 99% of your customers. Various governments try to fix this. The cynical reason it hasn't been fixes is they pay off politicians to make sure it doesn't get fixed.

The Reserve Bank of Australia prohibited no-surcharge rules twenty-something ago: businesses were allowed to surcharge up to whatever the transaction cost them, or a calculated average (the idea being that you weren’t allowed to make a profit out of it). They recently partly went back on this, no longer allowing card surcharges <https://www.cardsurcharge.com.au/>, but you are still allowed to offer payment method discounts <https://www.accc.gov.au/business/pricing/price-displays#toc-...>, so I presume they’re still banning the card networks from forbidding such a thing.

The problem in Australia was bank cards used to be the standard of electronic payment using eftpos as the gateway to debit from the bank. Late mid 2010's banks started to flog a visa debit card ... which additionally allowed a person to make over the phone or internet credit type payments - if they didn't already have their own credit card from elsewhere. At some point some retail stores started to drop eftpos for processing - unsure if visa debit was cheaper, quicker or just better for them. A purchase via visa used to be the merchant got to sell something a person would otherwise leave to get at a later time ... perhaps by then put up with second hand item or find a better deal in the mean time; so they gladly absorbed the fees visa, mastercard and amex charged - however either rules changed or it was so common place they started to pass on as a fee to the purchaser, a portion 1 .. 1.5% of the 2.5 .. 4 % that the credit card companies were charging merchants.

The govt both sides really want the economy here to eventually move to electronic so it can be tracked hard - however it was obvious the banks along with the $$$$$ credit card companies were making making a killing even at 2.5 % of all retail purchases ... so it was better to encourage merchants adopting close to free services like eftpos again which is about 0.2% max of a transaction.

Caveat - Of course some big retail stores can negotiate down the transactional percentage they pay in fee to Visa, Mastercard or Amex ... though I don't think any here got anywhere near as good a deal as Stripe. [1]

[1] https://stripe.com/au/resources/more/eftpos-fees-and-charges...

> where Visa and Mastercard debit is about 0.5%, and many credit cards are an average of 0.9% or more.

In the USA, this has not been the case for several years now. There are a few (I think 3) states that ban passing the cc fee through, but those are state laws not Visa/MC rules.

In Germany, some e-shops offer 1-2% discount when paying using bank transfer (vs card)

It would be good if governments forced a disclosure of these fees at checkout.

Reply on news.ycombinator.com