[beardoc]

I recently enquired about getting a merchant facility through my professional organisation's relationship with a major bank and they sent back this:

            Visa Charges/Mastercard charges
Micropayments 0.26%/0.68%  (Less than $5 Visa/ $20 MasterCard scheme debit)
Scheme Debit 0.62%/0.34% (Visa or MasterCard Debit Card)
Standard 0.84%/0.68% (Hand keyed transactions)
Premium 1.23%/1.25% (Platinum)
Commercial 1.50%/1.47% (Business Card)
International* 1.87%/1.85% (Visa & MasterCard Cards from overseas)

I found it interesting that your Platinum card is actually costing the merchant more than a standard Visa/Mastercard - is this common?

[Evan]

Originally Posted by beardoc

I found it interesting that your Platinum card is actually costing the merchant more than a standard Visa/Mastercard - is this common?

Yes, thats why they push the platinum cards so much, they make more money !
Why the retailer has to suffer is beyond me... i mean a transaction is a transaction, the cost to process is the same regardless of if its a card or a platinum card.

Thats life.... But all these fees tell me 1.5% is a premium that a retailer should charge for a transaction... not 3% as some do.

E

[oz_mark]

Originally Posted by Evan

Yes, thats why they push the platinum cards so much, they make more money !
Why the retailer has to suffer is beyond me... i mean a transaction is a transaction, the cost to process is the same regardless of if its a card or a platinum card.

Thats life.... But all these fees tell me 1.5% is a premium that a retailer should charge for a transaction... not 3% as some do.

Certainly is normal for the fee to be higher. In fact I remember once reading that some banks offer people premium cards after calculating that they are notr of much value to the bank. Moving to a premiuim card means they extract more fees!

One of the problems with the RBA reforms was that the retailer was free to charge whatever they liked for processing a CC transaction, not just passing the cost along. But looking at those rates, you can certainly see why they need to cap the points if they are giving 1 dollar = 1 FF point.

[beardoc]

Originally Posted by oz_mark

Certainly is normal for the fee to be higher. In fact I remember once reading that some banks offer people premium cards after calculating that they are notr of much value to the bank. Moving to a premiuim card means they extract more fees!

One of the problems with the RBA reforms was that the retailer was free to charge whatever they liked for processing a CC transaction, not just passing the cost along. But looking at those rates, you can certainly see why they need to cap the points if they are giving 1 dollar = 1 FF point.

These I should point out that these rates are negotiated through a professional organisation, and are probably a little bit lower than the average of the rest of the "small trader" merchant public (I can also get an Amex merchant facility for 1.49% with no minimum revenue).

But I can see the effect of this differential is that merchant fees will get set at probably 2% for ALL Visa/Mastercard transactions, even though the majority of transactions would be at the general (non-premium) rates, and so it would lead to less use of credit cards owing to the large surcharges on ALL cards (I won't pay a surcharge of 2%, but I would a surcharge of 0.5%).

It strikes me as the banks are shooting themselves in the foot with these differentials.

[Chicken]

Where I work had merchant facility from NAB up until last year, and NAB moved everyone from blended rate (same rate for all schemes and all types of cards) to mixed rates (which is what you were quoted). So we changed to a bank which we already have a relationship with, and turned out they are still doing blended rate, which is cheaper than the rate for standard cards offered by NAB, not to mention a lot cheaper than other rates like premium / business / internation rates from NAB.

So I strongly suggest you get another quote from another bank.

[jingles]

Originally Posted by Evan

Thats life.... But all these fees tell me 1.5% is a premium that a retailer should charge for a transaction... not 3% as some do.

E

I was once charged 5% for a restaurant to process my Visa card!

[Nutcase]

Originally Posted by Chicken

Where I work had merchant facility from NAB up until last year, and NAB moved everyone from blended rate (same rate for all schemes and all types of cards) to mixed rates (which is what you were quoted). So we changed to a bank which we already have a relationship with, and turned out they are still doing blended rate, which is cheaper than the rate for standard cards offered by NAB, not to mention a lot cheaper than other rates like premium / business / internation rates from NAB.

So I strongly suggest you get another quote from another bank.

Banks do differ in their charges depending on risk etc. With the blended rate this can be because of limitation in bank systems rather than anything else

[JohnK]

Australia should never have allowed surcharges to be levied on credit card payments.

Over the last 15-20 years the banks and retailers have been pushing consumers to rely on credit cards and less on cash and then continue to sling them with high interest rates and rip-off fees for the provilege of using credit.

[beardoc]

Originally Posted by JohnK

Australia should never have allowed surcharges to be levied on credit card payments.

Over the last 15-20 years the banks and retailers have been pushing consumers to rely on credit cards and less on cash and then continue to sling them with high interest rates and rip-off fees for the provilege of using credit.

If only merchants were limited to the cost of their merchant fees, I think it would be fair.

[JohnK]

Originally Posted by beardoc

If only merchants were limited to the cost of their merchant fees, I think it would be fair.

Agree the current fees are a lot higher than they actually get charged by the credit card company. But I also think that paying by cash should not be a cheaper option as it is actually more expensive to handle cash and the risk of carrying it on the premises and having to take it to the bank.

There should not be a surcharge in place as the retailer should be able to factor in the cost into the retail price. Anyway just my warped cynical mind at work again....