

Using a credit card? Watch out for the 'checkout fee' - codegeek
http://money.cnn.com/2013/01/27/pf/checkout-fee/index.html?iid=SF_BN_MPM

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christiangenco
Thank God. I almost feel bad using my Visa for small purchases when I know I
have cash (I'll sometimes ask the person checking me out which they prefer).

> Many big players in the retail industry have been up in arms about the
> settlement. Stores from the nation's largest retailer down to small
> businesses have lamented the agreement, claiming that it transferred the
> wrongdoings of credit card issuers to the consumer...Wal-Mart (WMT, Fortune
> 500), Macy's (M, Fortune 500), JCPenney (JCP, Fortune 500), Limited Brands
> (LTD, Fortune 500), Gap Inc (GPS, Fortune 500). and The Neiman Marcus Group
> were among those who joined the NRF in claiming that "raising consumer
> prices by adding an 'interchange tax' is no remedy for Visa's and
> MasterCard's continuing monopoly abuse."

Yes, this does add the option to put the credit card company's extortionist
fee on the back of the consumer, but from what I can tell it's completely
optional for the merchant to do this, so I don't understand these big
company's motivations (they can just continue not to charge the customers the
fee). Perhaps it's linked to these companies having their own co-branded cards
that let them split the fee's difference? Not sure what's going on here.

The bottom line is that this is incredibly good news for post-credit card tech
companies. As a consumer, I'm going to be presented with three options at
checkout:

1\. Pay with cash, which means you have to carry the cash and then carry the
annoying small pieces of metal you're going to get back with another piece of
paper that's the only proof you have that this transaction ever took place.
This option sucks, and is the reason why people for so long have opted to...

2\. Pay with your credit card, but now you have to pay an extra 2.3% fee that
before was getting footed by the business. You also have to carry your card
around with you, make sure there's money on it, and be super careful you don't
loose it. Which leaves...

3\. Pay with your smartphone. This will soon be _by far_ the easiest option
(in the case of Square Checkout, all you have to do is tell them your name),
and one of the most competitive, which will drive fees down. The customer
doesn't have to carry anything extra with them, their money is as secure as
their smart phone is, and fees will be minimal and only driven lower with
competition. Just brace yourselves for the standards war.

I'm just waiting for the day when I can reduce my "keys, wallet, phone" door
check to "phone."

~~~
army
I think it's unlikely that many retailers are going to pass along the fee via
a surcharge. The law in Australia now allows retailers to impose surcharges or
minimums for credit cards (by making these provisions illegal in the contract
between retailer and credit card company). In practice very few businesses do
so, with the exception of some small businesses that have maybe $5 or $10
minimums.

There does seem to be a lot of complicated maneuvering by retailers with
regards to the fees - the change actually gives the retailers more negotiating
power than before as they now have a stronger bargaining chip to use when
negotiating swipe fees "Oh, Visa, you want to charge me 1% of the transaction
amount when Mastercard only charges 0.5%? Well how about I impose a surcharge
on Visa customers only and see how they like it?"

It seems like retailers are making a stink about it since this isn't their
first preferred outcome where there is a ruling, settlement or law where
interchange fees are actually capped.

