Just yesterday, Vicki and I were trying to determine the difference between debit cards and credit cards, in terms of how much they cost the merchants when you use them.
Wouldn't you just know that today I'd see an article at the Freakonomics blog that would send me to this handy site at which you can find out what rates are charged at different types of stores for any make of credit card that you might have? (I had to laugh when the site asked me to enter the first 6 digits of my credit card, as I suspect that many people who haven't ever worked in the financial market might believe that those digits would somehow contain personal identification about them... rather than being the company portion of the number.) For the type of card I used - MasterCard - I saw rates ranging from 0.7% (paying an electricity bill over the phone) to 18.7% (buying a pack of gum at a variety store), although the norm seemed to be about 2% - 3.5%... which is right in line with what I had long thought it to be. (I'm under the impression that debit card charges, on the other hand, are usually either a flat rate per transaction or at worst a lower percentage than what a credit card transaction would cost the store.)
So now all I need is a similar tool that answers our debit card question, and we're off to the races!
Subscribe to:
Post Comments (Atom)
2 comments:
Looks like debit (in canada anyways) is a flat fee.
Forgive the poor english:
http://www.canadadirectory.net/articles/publish/others/The_Nuts_Bolts_of_Merchant_Account_Rates.php
so the merchant pays 5 cents or what ever for each transaction.
The banks hate the debit cards because they are so popular. They were mandated to have flat fees when introduced, but now the banks claim they can't make the system "better" because they can't pay for it. I think they mean "pay for it before we implement it". And better is smart-card based systems, but frankly I don't see the advantages over what we have now.
Post a Comment