
Shoppers Love Rewards Credit Cards, Retailers Hate Them - prostoalex
https://www.wsj.com/articles/shoppers-love-rewards-credit-cards-retailers-hate-them-1537867801
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jarym
Here in the UK I’ve noticed that Amex is not accepted by a lot of smaller
businesses. When I ask why I’m told it’s because their fees are 4-5% - higher
than both Mastercard and Visa.

The thing is reward credit cards really feel like the banks are fleecing
merchants and giving a small portion as a kick back to the consumer. If card
issuers want to provide an incentive to their customers then they shouldn’t
fund it by charging the merchants more.

All that will likely happen is merchants will increase their prices and those
without reward cards will end up paying more and getting less. It’s probably
why on so many sites (especially airlines!) I have to pay ‘2% credit card
processing surcharge’.

If Visa and Mastercard don’t want retailers to get selective then there needs
to be a single charge rate - and I think it would be a good idea that this
information is shared with purchasers at time of a payment.

~~~
agurk
Interestingly a barber in the City (of London) I occasionally go to started
accepting Amex recently. I had asked them the first time I used them (back in
2008) why they didn't accept Amex and it was for the high rates.

When I asked why they'd started accepting Amex, they said that the rates on
some rewards cards they were accepting were so high that Amex was better value
for them.

I also assume it was helped that the demand for Amex is higher in the City
than the UK average.

~~~
J-dawg
I've noticed a lot of smaller places have started accepting Amex because they
use iZettle machines or similar.

It's funny that many medium-sized business will reject Amex, while a little
burger stand at a farmer's market will (sometimes) accept it.

Perhaps iZettle have decided to take the hit on the Amex fees and charge a
flat fee to their customers.

~~~
techstrategist
Hi, I saw one of your old comments and was hoping we could chat about it as
I'm going through something similar. Email is in profile if you're willing.

[https://news.ycombinator.com/item?id=12099420](https://news.ycombinator.com/item?id=12099420)

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bluecalm
There should be credit card charges added to every bill. This way we would
have competition to make things cheaper instead if pointless reward systems -
the sole purpose of those being to stifle competition.

If the stores want to give discount for paying with card they could do for
example 0.5% or 1% and add the rest of the charge to the bill so there is
still incentive for CC companies to compete.

As it is customers paying with cards get a hidden discount in comparison to
those who pay with cash. Shops are forced to cover that discount as well.
There is no incentive to provider cheaper payments either as the customers
won't benefit. We really need a law that prohibits those hidden charges.

~~~
pjc50
The EU has recently gone in the opposite direction by centrally banning such
surcharges: [https://www.moneysavingexpert.com/news/2018/01/cards-fees-
to...](https://www.moneysavingexpert.com/news/2018/01/cards-fees-to-be-banned-
from-saturday/) ;
[https://www.bbc.co.uk/news/business-40655333](https://www.bbc.co.uk/news/business-40655333)

This really does feel like a hidden subsidy to cards, presumably with the aim
of moving towards full cashless operation. Norway is almost there already.

~~~
hocuspocus
The EU also capped interchange fees though, in most cases at least.

I'd rather pay whatever payment fee (cash, debit, credit) the merchant sees
fit. I have no problem paying a little more for my own convenience, but I'd
rather not subsidize Amex and corporate cards.

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pyther24
I'd love to pay cash, but it just doesn't make sense given the rewards and the
benefits of the reward credit cards. Citi Double cash gives me 2% back and
does price matching. That is a huge savings over the course of a year.

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bacon_waffle
Here in New Zealand, retailers will often charge a few percent extra for
credit card purchases, and a lot of smaller shops won't accept them at all.
EFTPOS (basically like a debit card in the states) seems to be much more
commonly used, often with contactless terminals.

It seems to work well - I do have a rewards credit card, but certainly
couldn't get by with just that card.

~~~
nisse72
In New Zealand, EFTPOS costs the retailer a fraction of what credit card
transactions do. When you swipe/insert your debit card, it goes through the
EFTPOS system. But when you use the same card contactlessly, payment is
processed by the credit card company and the retailer is charged a credit card
fee or similar. That's the reason many retailers don't accept contactless
payment.

The banks and card companies would surely love for EFTPOS to die, but the
retailers love it. There's a reason every card issued today supports
contactless payment, and you can't opt out.

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raverbashing
The rewards motives are 2 fold: 1) to have the customer user their card
(obviously) 2) to centralize spending in one card, so that the card holders
have your information and spending habits

Some cards give better rewards for some type of shops. Amazon has their own CC
as well.

Outside of the US/Canada most people get CCs from their bank and not from 3rd
part vendors though.

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moviuro
I'm not familiar with Reward Credit Cards, which seems to not have taken off
in France.

Cashback here is opt-in, bank- and retailer-specific. Meaning that my regular
MasterCard from Bank B used to purchase stuff at retailer R gets me x%
cashback. So in a way, retailers' woes won't (shouldn't) happen here...

~~~
eloisant
Well, most cards in France are not credit cards any way, they're debit cards.

Sometimes you can have credit cards with deferred payment (everything at the
end of the month instead of immediately) but actual revolving credit cards,
like in US are pretty rare.

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mike22223333
If you charge credit card customers extra, credit card companies block you
from network.

This should be illegal but it's not.

~~~
jpatokal
It is illegal in some countries like Australia.

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amaccuish
I feel like the right to reject would lead to awful problems. How do I know if
the particular card I get would work at a particular shop etc. There is
certainly a problem, but rejecting cards outside of the normal
Visa/Mastercard/Amex system is not the way forward and would be very
confusing.

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neonate
[http://archive.is/gEOen](http://archive.is/gEOen)

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denzil_correa
This always reminds me of the alternative : cash [0].

[0]
[https://news.ycombinator.com/item?id=13782561](https://news.ycombinator.com/item?id=13782561)

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vazamb
Taxpayers already pay quite a bit to keep the cash system running. I think it
would make sense for the state to provide baseline infrastructure for
electronic payments.

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qubax
Just a question. I saw this thread more than a day ago.

"32 points by prostoalex 1 day ago | past | web | 32 comments"

[https://news.ycombinator.com/from?site=wsj.com](https://news.ycombinator.com/from?site=wsj.com)

How come it's on the front page with "32 points by prostoalex 7 hours ago"

How did "1 day ago" change to "7 hours ago"?

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Mirioron
Isn't it curious that in an age where people want more privacy and control
over their data that shoppers would love these kinds of cards?

~~~
ndnxhs
How is it any worse than other credit cards?

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mjevans
Paywalled, but yeah; it'd be nice if everyplace used something like GNU Taler
instead of credit cards.

[https://taler.net/en/index.html](https://taler.net/en/index.html)

While we're at it, please get rid of tracking and 'membership' cards too -
just give me good prices on all the things every day.

~~~
benbristow
They need to invest in a better website and make it friendlier for customers
and merchants if they want to make that a thing.

GNU have never been good at design

~~~
mjevans
You'd have to have buy-in from some lending institution, and presumably they'd
be the ones to make the user facing documentation/education to fit their
clients.

However if it's only one bank we're right back to where we are with PayPal,
where there's only one provider facing consumers / sellers; instead of
competition to drive the markets towards actual efficiency and liberty.

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timbit42
No paywall: [https://finance.yahoo.com/news/shoppers-love-rewards-
credit-...](https://finance.yahoo.com/news/shoppers-love-rewards-credit-
cards-140600098.html)

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onion-soup
Solution to this problem already exists, it's called cryptocurrency. Yet
people still trash it

