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0 pointsrsj_hn4y ago0 comments

> A raw 3% of revenue is huge

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".

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Jensson4y ago

> 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.

perl4ever4y ago

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...

rsj_hnOP4y ago

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.

Jensson4y ago

I think it is mostly that it confuses buyers and that confusion costs more than credit cards costs. You'd need regulations to get around this.

j / k navigate · click thread line to collapse

0 comments

Jensson4y ago

> 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.

perl4ever4y ago

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...

rsj_hnOP4y ago

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.

Jensson4y ago

I think it is mostly that it confuses buyers and that confusion costs more than credit cards costs. You'd need regulations to get around this.

j / k navigate · click thread line to collapse