Credit Card Processing Fees

These credit card fees are likely under 3% in the US. So taking 5% adds about 2% for convenience.

Maybe they meant credit card interchange fees of 1-3%?

Visa and Mastercard control most of all the credit card transactions in the world and they both charge merchants a percentage (e.g. 1.5%) PLUS a small fixed fee (e.g. 40c). It's that small fixed fee that makes it pointless for $1 transactions cause you just lose too much.

Yes, their business model is charging merchants at credit card rates (~3%), and billing you at debit card rates (~0.1%).

In the US, card companies require that merchants charge the same price for both cash and credit, so there’s no incentive to avoid using cards (so the processors make more money overall on fees).

Merchants don't pay those fees, the banks do.

The banks don't eat the costs -- the merchants do.

I don't think it's stupid that it costs money, but I am surprised fees are still as high as they are. I suspect it's got something to do with how opaque the processing fee is for the customer.If I understand it right, merchants often aren't allowed to pass on the fees or (much the same thing) give discounts if you chose a cheaper payment option. No wonder there's little competition on the fees, and Visa[1], Mastercard[2] and PayPal[3] are all having record prof

There is no perhaps about it: Every card out there that gives a decent amount of cash back has a very large interchange fee. The very best ones are easily a percent and a half more than the cheapest ones. Now, the small business might not be paying the fees in such a way that paying with a different credit card costs a different amount of money, but then that just means their payment processor is averaging fees out, and different averages would make the processor charge more overall. Still, usin

> Where are you located that visa and MasterCard are charging 3%?I am guessing the good old unregulated free market of the US of A: https://www.valuepenguin.com/what-credit-card-processing-fee...There, banks and credit card companies offer huge perks and cash-back to card holders. That money must come from somewhere, and that's from the transaction fees pai