Walmart Canada stops accepting Visa cards
walmartcanada.ca
walmartcanada.ca
If I understand correctly, credit card terms forbid stores from offering two different prices (one for paying with and one for paying without), because if they didn't, some stores would offer a 2-3% discount for cash, and customers would switch to cash. Meanwhile, most people I've spoken with are happy with the system, because they feel like they're getting money back for free through cashback/reward programs, so credit card companies are incentivized to keep increasing their merchant fees so that they can give more money back to their customers. Restaurants/shops that don't accept credit get less customers, and are forced into the system as well. While the government could do something about it, they don't because they can track every credit card transaction (-> tax revenue), but they can't track cash. And cash-paying customers get to pay the 2-3% "credit card tax" on every transaction, which is so ridiculously backward.
I hope Walmart's decision snowballs.
I was going to link to The Good Guys and their "Pay Cash Pay Less" marketing, but it appears they scrapped their cash discount after finding customers increasingly prefer to use electronic payments:
http://www.smh.com.au/business/the-good-guys-scraps-cash-dis...
That's a weird reason. Surely that's the whole point of the discount? If customers preferred paying cash, then no discount would be required.
I think the point of removing the cash discount is they can use the 'extra' 3% margin earned on those remaining cash sales to subsidize lowering their price via credit card to be more competitive. Their business is based on offering the lowest prices, but the cheapest price was cash only. The discount for cash no longer lures customers to come to their stores, so there's no incentive for the store to continue passing on the discount to the customer.
That's what I meant.
Also, some merchants cater to a demographic that likes to use cards a lot and is sensitive to convenience; and making that distinction may cost the merchant in terms of customer appreciation.
If you are a large business then cash handling companies that securely transfer, count, and deposit / clear it for you charge the same and even more than many credit card companies.
Cash is only "cheaper" for really small businesses that handle the count and the deposit themselves.
And even then there are some fees because banks can also charge a deposit fee when you bring in unsorted cash.
Square, iZettle and I think PayPal and a few other are doing things in this area, leveraging smartphones, but it's still early days.
I've never been impressed with anything using a cell phone though. It's too clunky of an experience. I get that it might be useful for farmer's market and other very small retail situations, but when I'm going into a retail store, a real POS terminal is better.
I haven't found that to be true at all. Are you speaking about a non-US context?
In the US you can almost universally go to your bank ATM and withdraw cash without a fee. There's also no fees for having a checking account.
Banks treat cash very carefully. If you bring in a stack of cash that they have to count once to see how much it is and then again to verify it's going to take time and they might charge you for that.
They literally said "withdrawal fees."
I don't know of any bank which charges you to deposit cash. I occasionally drop off large stacks of cash and have them count it—there's never been an issue.
Maintaining ATM's and counting and transporting cash costs money, cash isn't free I don't know about US banks specifically.
What other fees? I've literally never paid a fee to my bank for anything. And it's a major bank (Chase).
Because the bank is buying Treasuries at ~1% or so and making money off of your deposits, and is likely only giving you 0% or maybe 0.05% interest.
If you've got $10,000 in the bank, that's basically a profit of $100 / year that the bank is getting from your account.
But that's not a "fee." Obviously banks cover their operating expenses somehow. That doesn't mean they charge me to have an account or to deposit cash (in fact, charging for deposits would be counterproductive).
If you get paid via direct deposit then you almost certainly have many options for getting a free checking account regardless of what city you live in.
> There's also no fees for having a checking account
In the US, people with poor credit are often unable to get even a checking account. This is because banks figure those customers are not going to be profitable since they're not going to use the services they can earn fees on.
"Going to your banks ATM" isn't very convenient 99% of the time unless you never leave town. You end up going to the closest ATM. Especially if you are on foot.
Credit unions have alliances that they can join to use each others ATMs fee free, same with banks. That doesn't change the fact it's often inconvenient to go to an ATM you don't have to pay for and you need to pay sometimes.
Here's a comparison of checking account fees for various banks: https://www.nerdwallet.com/checking-accounts?account_feature...
But there are other reasons for preferring cash. For instance, a bank or authorities cannot quite as easily shut down your business if it runs on cash money, compared to having everything in bank which can be confiscated instantly, on-line.
https://www.cardpaymentoptions.com/fee-sweep/debit-fees-expl...
Frankly I wish more places would offer a cash discount. The rewards program schemes have always bothered me.
But there are a lot of markets where price competition drives down the margins for the "main" product, so that the retailers make up their profits on smaller stuff. I've read that a store selling electric guitars or bicycles makes relatively little profit on those items, but instead, makes their nut on accessories, things that wear out, service, lessons, etc.
Additionally, some small restaurants and shops did the same thing. Usually these folks get charged more for processing credit cards than the large places.
Since Jan. 27, 2013, merchants have had the ability to assess a surcharge on customers who pay with credit. However, if they choose to take this step, there are a lot of rules that must be followed, including:
- Notifying consumers that they’re being charged for using credit, both at the register and on the receipt. On the receipt, the merchant is required to state the exact dollar amount you paid in credit card surcharges.
- Charging customers only what they’re paying to the credit card payment networks in swipe fees (again, this is usually around 1%-3.5% of the cost of the transaction). In other words, merchants are allowed to pass on the fee to the customer, but aren’t allowed to make a profit on credit card surcharges.
- Staying on the right side of state laws. As of August 2014, nine states prohibit retailers from passing credit card surcharges onto consumers. They are: California, Colorado, Connecticut, Florida, Kansas, Maine, Massachusetts, Oklahoma and Texas.
- Limiting surcharges to credit card transactions. If you pay with debit, the retailer isn’t allowed assess the fee. This includes debit transactions where you sign for your purchase as opposed to entering a PIN. Only credit card users can be hit with a surcharge.
Source: https://www.nerdwallet.com/blog/credit-cards/credit-card-cha...
In Massachusetts at least there's a loophole for gas stations. In fact that's always been the case...
http://www.mass.gov/ago/consumer-resources/consumer-informat...
> Staying on the right side of state laws. As of August 2014, nine states prohibit retailers from passing credit card surcharges onto consumers. They are: California, Colorado, Connecticut, Florida, Kansas, Maine, Massachusetts, Oklahoma and Texas.
Do you know the rationale for these laws?
http://www.leg.state.fl.us/statutes/index.cfm?App_mode=Displ...
As a Florida resident I can tell you that if there is any enforcement of this, I've never seen it. It's very common to see verbiage like 'must pay x% if using credit' or 'credit cards additional $x', especially in non-chain restaurants. Some gas stations just list two prices. I don't like it, but I am not going to carry cash around so it's just how it is; I was almost denied service at a restaurant once for pointing out that their credit surcharge was not legal.
The problem was the Most Favored Nation clause in the credit card contracts. Merchants could offer cash discounts, but they could not offer discounts to non-Visa credit cards.
Since the antitrust settlements, all four U.S. credit card networks have allowed surcharges. Also, the Most Favored Nation clause only applies to "equal or higher cost" competitors.
Walmart US could fight Visa by adding a surcharge only to Visa cards. Walmart Canada cannot. In 2013, a similar antitrust case was dismissed in Canada.
Also, most appliance stores will give you a better discount when haggling if you pay with cash/debit card.
I am not happy with the system since I categorize the money back programs essentially a corruption of the buyers in order to keep them on the card.
I want to pay safe, fast and easy. No higher prices and no cashback incentivation program needed for me.
Interestingly just around the time when this was introduced in mid-2015 all major German supermarket chains suddenly started to accept Visa/MasterCard; before they only supported the German Girocard system. The fees Visa and MasterCard demanded before were probably way too high.
Compared to that the 2-3% fees in the USA really seem to be very high as well.
The German banks are just too greedy and invested in their own shitty Girocard scheme which doesn't even support tokenization which would be required for Apple Pay.
For Maestro/MasterCard Debit/VPay/Visa Debit that's 0.2% in the whole EU (UK & DE included).
The girocard scheme negotiates the fees with the merchants and it's around 0.15% - 0.2%.
At least for the banks, it's not a big difference.
As such, almost every store in Denmark accepts Dankort. But - like every other place - they are not allowed to pass that charge onto consumers directly. So it mostly happens indirectly, i.e. the prices in the stores. It is important to note, that until a few years ago, there was no transaction fee on Dankort transactions. It was practically a public subsidised credit card system.
And it worked great.
Now the EU is requiring that bundled cards get a choice. You see, one disadvantage of the Dankort was that it only worked in Denmark. So they made a deal with Visa to make a bundled card, called 'Visa/Dankort'. In Denmark, it would use the Dankort part and abroad it would use the Visa part.
But now consumers are required to make a choice for each transaction whether they want to use the Visa or Dankort part. It might seem great that you get a choice, but there is really no reason to pick the Visa part in Denmark. But since stores aren't allowed to pass the costs directly onto the consumers who pick Visa, prices are likely to go up, even if just 1% of every transaction is suddenly a Visa transaction.
I assume these rules are part of the capping of fees in the rest of the EU, and many Danish observers also suggest that these rules probably work great in the rest of the EU, just not that beneficial in Denmark.
Anyway, the same regulation that introduced the application choice also stopped the schemes from prohibiting surcharges.
Ticketmaster charge 0.66kr, for example: http://www.ticketmaster.dk/help/gebyrer.html?language=en-us
So either the Danish implemented regulations they didn't actually need to implement or the Germans are not following the regulations.
Actually, CB (for "Carte Bleue") looks so close to the generic "carte bancaire" word for "bank card", that few people even know that it's just a national card thing.
I don't know if stores are allowed to charge customers differently for different payment means, but I guess not since I have never seen it. However some stores only take cards for a minimum amount. The largest chains though don't have any limit, and I've actually already paid amounts less than 1€ with my card.
But people actually still often say "carte bleue" to refer to any kind of payment card (even a Mastercard one). Apparently just because it was the name of the first payment card in France.
So yeah, you have to swap carte bleue and carte bancaire in my previous post, I guess.
Need to implement? There still is such a thing - albeit not much of it - as independent national legislation, even in these nightmarish sunsetting years of the EU.
In Finland our local national system was shutdown (due to sepa) and now all the cards issued are either visa or mastercard (debit / credit cards).
Interestingly it also seems that credit card theft has risen to a whole new level.
In the same timeframe, VISA and Mastercard have seen a surge in merchants participating in the system, like grocery stores that used to accept BankAxept cards only. This might have something to do with people changing their preference to credit cards with benefits like airline miles, but also to allow travelers access to what's more and more becoming like a cashless society.
i.e. You and non-participating parties were paying for it through taxes. So the transaction fee was hidden by layers of bureaucracy but was still existent.
> Compared to that the 2-3% fees in the USA really seem to be very high as well.
Keep in mind that US credit cards offer 2% cash back, so the system isn't actually handing a bunch of money to middlemen.
Not exactly--there are companies taking a bite out of the fees all the way down.
I run two retail stores, and after initially using Square (which charges a 2.75% flat fee), we switched to a merchant processor that uses what's called "interchange plus"--where they just charge us the interchange rate plus a small additional fee.
Chase Visa debit cards are the #1 card we process, and our fee went from 2.75% with Square to 0.05%. Yes, you read that right! That is on a signature process, not a PIN.
We do have to pay a monthly fee now, but the savings is ridiculous--some $500+/month over Square's rates.
That $500/mo was Square's profit margin, basically. Our numbers showed that at about $5K-$8K/month in transactions, interchange plus processors will start to beat Square, and by the time you're doing $10K-$15K/mo in sales, it really starts to add up.
I've used credit cards for almost all purchases for many years, and the only other place a surcharge is likely is a tiny, struggling business, like a convenience store or a rural pub.
This is known as surcharging. The rules differ by country, the same goes for interchange. To give you an example: my country it was forbidden to forbid the merchants to do surcharging (no really). Essentially the merchants where allowed to do surcharging. Then interchange was regulated down and the ban on forbidding surcharging was lifted. In theory the acquirers or payment schemes could forbid the merchants to do surcharging. AFAIK none of them did.
What you can do as a card holder is file a charge back over the surcharge amount. These get accepted.
Some countries in the EU started requiring cash registers and receipts and some merchants were able to make some quite good revenue improvements in the month they were introduced :)
In the uk, nearly 20 years ago, the supermarkets started offering "cashback" on every transaction, where you bill would be increased by eg 10 pounds, and in return they'd give you a 10 pound note along with your receipt.
The genius being that they could save huge amounts on their cash handling/management fees by moving the value through the card networks instead.
(I believe this was via debit cards, which had lower fees and are by far the more popular card type in the UK, possibly in the EU as a whole)
Indeed. The debit card charged a flat fee per transaction, so giving the customer money instead of paying the bank 0.x% for cashing it in was a logical choice.
yup...the point of sale systems skip the cash-back step entirely if the card is a credit or cheque card.
Why?
The alternative would be that companies either don't accept credit cards at all (inconvenient) or charge an extra 2-3% for credit card purchases.
I don't see how that is any fairer than forcing cash customers to pay the full price as well. Somebody is losing either way, and I see absolutely no reason that cash should be privileged.
It makes a huge difference. A market economy depends on prices to guide behaviour. It's very important to make sure that all costs are internalized.
In practice, I think most traditional retailers like it when consumers use cards because it makes their lines go faster and wouldn't really increase their prices for most card carriers if they were allowed to do so (AMEX might be a different story). The cashier doesn't have to wait for the consumer to fumble around for the correct combination of bills and coins, the customer doesn't have to wait for the cashier to count out change, and that means the line moves faster and the retailer can process more transactions and make more money.
One problem with Interac, however, is that most banks have limits on how many transactions can be done per month, or pay additional fees. The fees can easily add up to ~ 100-150$/year for an average bank account. We can go around it by leaving 2000-3000$ at all times in the bank account, or get a credit card. Win-win for the bank. So yeah, Visa deserves the pushback.
It seems reasonable that the costs associated with the various payment methods can be passed on to the consumer that chooses that method.
If I decide to use digital currency could I opt out of all the associated costs related to cash? Including printing it, shipping it, storing it, transporting it, counting it and other aspects that a digitized monetary transaction automatically handles?
The problem, as criddell points out (https://news.ycombinator.com/item?id=11888198), is that it's not a matter of whether or not to charge cash customers full price, but of whether or not to force cash customers to subsidise the fees the merchant must pay for credit customers.
Undoing this is still forcing cash customers to pay full price, but credit customers to pay full price + the associated extra fees. Pretending that the difference is a "cash discount" rather than a "credit fee" is, I think, just terminological skulduggery (much like stores where every item is always on sale).
Yes, you have this exactly right. It is one of the most diabolical scams ever. It is essentially a 2-3% private tax on the entire retail economy. If the government did that, the torches and pitchforks would come out in an instant. But because the cost is hidden behind regular retail prices, no one cares. (Well, that's not quite true. The merchants care. But they are too busy running their businesses to organize an effective opposition.)
You may be too young to remember when a person had to carry a significant amount of cash around all the time, and/or a checkbook, to pay for routine purchases. When every payday involved going to the bank, waiting in a queue to deposit your check and get enough cash to get through to the next payday. It was a PITA.
Compared to the convenience of direct deposit, ATMs, and card transactions, most people would think it's well worth slightly higher retail prices.
It's both. The cash-back part is a scam. They take 3% out of your back pocket and hand you back 1% and you think you've gotten a good deal.
Modern technology enables secure money transfer to be provided at an order of magnitude less cost than the credit card companies charge. Competition is supposed to take care of egregious inefficiencies like this, but the banks have an effective monopoly, enough regulatory capture to keep out competition, the ability to fob all the risk of fraud onto the merchants (who pass it on -- tacitly) to the consumer, and hence no incentive to change, and so they don't. That is the scam.
> You may be too young
LOL, I'm 52.
I pay for most things with a credit card. Here are the value-adds that I receive in exchange: * net-25 payment terms (eg free short term credit)
* anti-fraud: the money isn't actually taken from my account until I make a payment at the end of the month. This gives processors some skin in the game to solve fraud.
* warranty extensions
* risk of losing cash, either by loss or theft
* centralized accounting. No data entry.
I'm not saying the system is perfect. It can definitely be improved. But, personally, that's a pretty nice set of value that I receive in exchange for using the cards.
Is 2-3% excessive? Probably could be cut back. But if I'm getting 1% back, we're now talking 1-2% that it costs me. Seems likely that a big chunk of that is due to fraud, which isn't something that would disappear by legislating lower rates. (additionally, it opens the opportunity for me to churn cards. I haven't done the math, but I open 2-4 accounts per year and receive ~$500 in rewards. $1k in signup bonuses is at least 3-4% of my credit card spend. For those who are able to safely take advantage of the system, you actually can be net-positive PLUS receive the benefits above)
I do understand the frustration for people using cash, because they typically pay for these features regardless of whether they want to. I also sympathize with folks who want their purchases to remain more anonymous.
For me, however, the value is greater than the cost.
http://time.com/money/4036511/venmo-more-check-than-cash/
http://www.slate.com/articles/business/moneybox/2015/09/venm...
http://www.slate.com/articles/technology/safety_net/2015/02/...
Venmo is not the solution, it's a symptom of the problem.
I also see it on any "public" transaction. Try to pay your property or income taxes, university tuition, etc. using a credit card -- there will be a "processing fee" tacked on.
But the terms that forbid passing on the transaction fee cost to the consumer is wrong. It's an externality that causes us to all make the wrong choices. The business gets hit with variable transaction feed per customer, but that's aggregated, the merchant has no way of knowing which cards cause the highest fees to be incurred. If it were possible to charge the actual cost of transaction to the customer right at the moment of sale as I line item, just like government tax, we'd all be making smarter choices.
We don't even have to cap the cost, if people could see this, they'd overwhelmingly make a smarter choice possibly even driving the cost down less than the debit card fee cap.
> We don't even have to cap the cost, if people could see this, they'd overwhelmingly make a smarter choice possibly even driving the cost down less than the debit card fee cap.
The two problems I have with this are:
1) I'm not a partner in the business. I have zero interest in seeing fees and other costs "deaggregated," especially if I have virtually no control over them. And I am cynical enough to think that, since meaningful control is not really a thing, the marketplace will rapidly descend into "everybody does this and they all charge roughly the same fee so there's really no competition at all," like the random fees on telco stuff. Besides, under the current system, if the cost of taking cards is too onerous, stop taking cards. One of the most annoying trends in business in the last decade or so is the idea that the base price of an item or service almost seems to come out to be the amount of profit the merchant expects to receive and 14 items of below-the-line fees make up the actual cost of doing business. I don't care what a merchant's cost of doing business is. Put a price on the item, preferably the out-the-door price but that's just wishing for a pony, and if I'm willing to pay it, I will.
2) Unless and until the day arrives that the entire value of my transaction account can't be wiped out just because I dared use my plastic payment card at a merchant with less-than-realistic security measures, I flatly refuse to use a debit card. Yes, I know that I am technically not liable for fraudulent purchases on a debit card but the several-day delay between "oh shit this bad thing happened" and "ahh my money is back where it should be" is unacceptable. As is the stunning lack of any other consumer protections on a debit card ("had a problem with a merchant? Sort it out yourself, puny customer," is the reaction on a debit card).
The merchant clearly receives a benefit for taking cards as do I. But our interests are not aligned to the point that I should be the only one picking up the cost of that benefit.
(Oh, and it irritates me out of all proportion to the provocation how a lot of merchants handle the fees. "Your total will be $5.19." presents card "Oh, now your total will be $5.47 because card surcharge that's buried on a label sitting under the till." Grrrrrrrr.)
100% agreed. As far as I'm concerned, one of the things I'm buying when I deal with a business is minimized cognitive load. Any time I see somebody tacking on a bunch of extra fees that I can't control, I resent it. E.g., the "fuel surcharge" thing, or SF restaurants adding health care costs as a bill line item. Put 'em in the price and stop screwing with me.
Right now the federal law actually says businesses can't pass on the cost of the debit card fee, but can pass on the credit card fee (not in certain states). But in either case you learn what your card costs you, rather than passing on that cost to everyone who uses debit cards, cash, or credit cards that incure lower fees to the merchant.
I don't know about (aboot?) Canada but the Durbin amendment outlawed that restriction in the U.S. So any merchant is free to offer a discount for cash.
But as you rightfully note, consumers are generally happy with the card system. Many receive a 1-2% discount or other benefit via reward programs, so the opportunity to steer consumers to cash via discounts is limited.
See: http://blog.legalsolutions.thomsonreuters.com/wp-content/upl...
However starting in 2013 merchants can now charge a processing/convenience fee. This came about as per of a class action lawsuit I believe. There are still several state and municipal laws and nuances to consider though.
Also, I gave had stores in the small town I live in tel me that they prefer getting cash, and I try to oblige them.
First, I have to find an ATM somewhere. Luckily my bank reimburses ATM fees, but many don't. Plus, I can only take out $20 at a time. If I want to buy something that costs $5, I take $20 out (+ a $3 fee which is 15%, a hell of a lot more than credit cards charge). Now, do you think I'm going to put the remaining $15 back into the bank? Hell, no. I'll find something else to spend it on. So this $5 purchase effectively cost me $23. That 2-3% doesn't sound too bad.
What ATMs do you use where you can only take out $20 at a time? I usually see caps of $200-300 and once in a while, on the nasty-fee ATMs they're $100 but I just find another one.
By your logic, when I'm out of cash and make a $300 withdrawal to buy a $3 snack with it, the other $297 evaporates instead of sitting in my wallet like real money.
It's weird to me that so many people refrain from carrying cash on the logic that they might be mugged or lose their wallet. Okay, those things could happen, but how often? I've been mugged zero times and lost my wallet once in the last 20 years. Assume I had $150, half my usual withdrawal amount, in the wallet at the time. How long does it take someone to rack up $150 in ATM fees while trying to avoid that exposure? Quite a bit less than 20 years! I'd wager most people spend more on fear fees than they'd potentially lose if they simply carried the cash, because the loss events are so very rare.
As for compulsively spending money in one's pocket, http://www.nbc.com/saturday-night-live/video/dont-buy-stuff/...
I work in the payment processing industry and I am just disgusted in the way everyone operates (particularly Visa / MC). Low security, trying to push liability, etc. All of this to shave money off of the transactions at just about every step of the way.
2-3% is the top rate applicable only high risk traffic with the card not present.
I'll get to the cash, get told "sorry, no visa", and take out my debit card to pay that way instead. Really not a big deal.
It's just Walmart annoying their customers to try to prove some point to Visa.
The relevance of the parent you responded to is that a Canadian shop not accepting Visa (or Mastercard) is only a very mild inconvenience because there are other widely used payment networks.
in Canada (actually, pretty much everywhere but America)
since the systems sound pretty identical.
Obviously Discover, Amex and Diner's Club exist, but they are barely worth mentioning. Hardly anyone (proportionally) carries those cards, and only a few merchants accept them.
In the United States, for a merchant to refuse Visa would be suicidal. In Canada, it's almost a non-issue because all the debit cards are processed on another, non-Visa network.
What of the above do you disagree with?
My bank card now is both an Interac card and a Visa Debit card. But the Visa Debit part work anywhere except online US retailers.
My British debit cards use either the Visa or Mastercard network.
My Danish one does too, though it also uses the local Dankort network if available.
A few years ago the pinguins took over (https://www.youtube.com/watch?v=x48eLs8tnJo) and basically every card in the UK is now either Visa/MasterCard/Amex and very few Maestro.
The latter is more widely accepted for online shopping (only some merchants accept Maestro, whereas everyone accepts Visa and Visa Debit usually works there), so I was happy.
The merchant can also disable you from selecting 'credit' while paying to force it to use the debit network.
Its also like this in Australia.
Very few banks still issue debit only cards (Switch/Maestro), they do if you ask for them, but they mostly only work at the ATM.
This never happens in the UK. It confuses the heck out of me in countries where it does (e.g. New Zealand).
I don't think any UK banks have their own payment network. The cards you get to access the account directly are debit cards (usually Visa Debit or Maestro), some (i.e. children accounts) give you a 'cash card' which only works at that bank's ATMs.
Same thing in Singapore. Never need to select credit in NZ / Aus / SG. Unless you specifically want to use credit.
1. CREDITO
2. DEBITO
where you choose if you want to pay with credit or debit.
Last year I went to the UK on vacation. While paying my bills I noticed most people wouldn't know what to do when prompted. They would look confused and just hand me the card machine and let me handle it.
In the past a lot of cards were Switch, which became Maestro and then everyone dumped it for Visa.
Fortunately we still have the Link system where you're not charged for using an ATM that doesn't belong to your bank. cough Canada cough.
Somebody steals your credit card and goes on a spree? Call your bank, dispute the charges, and life goes on.
Somebody steals your debit card? Good luck, money is gone from your bank account, and BTW, your mortgage and auto payments just bounced, so we're going to tack on some overdraft fees too. Have a nice day.
I had $4000 stolen from my bank account via a compromised debit card. The charges were reversed the same day. The bank is still liable for fraudulent transactions if you didn't authorize them.
With credit it's he bank. Fine show my account balance 4k high, I refuse to pay my bill.
Same thing with debit and it's my cash missing, and I need to go through a dance to get my own cash back.
In fact just had a CC stolen last week. No harm to me because I wasn't holding the burden.
I refuse to use my debit card for anything but at an ATM.
They also had this insecure-dy-default behavior allowing checking account overdraws to start pulling out of savings. It's worth checking that setting, too.
As a family, we set up an extra account at Schwab to write checks and do automatic payments against. There wasn't any additional cost to us - having some money sitting in the account is hardly worth worrying about with what Schwab (or anyone else) pays in interest.
The big benefit to me is that the account doesn't have over-draft protections. I have to manually move money into the account from a different account where paychecks, etc. go into. That account can't write checks, etc.
If our account is compromised, well, we lose (temporarily, I hope) what's in there but not the cash that accumulates to pay for property taxes, etc.
Overdraw protection is tricky. For example Ally offers it for free for me. If I really did accidentally overdraw my checking, I would want it sucked from my savings. However if someone stole my Ally debit, I would not want both my checking AND savings drained...
So worst case you are without a small amount of money during any dispute/fraud resolution period, but your major regular ACH payments are not at risk.
The downside is having to monitor your balances closely and transfer funds more often (which can sometimes involve a fee but if you shop around you can find banks that don't change a fee for inter-account transfers).
Works well.
The one time a charge went through my bank reversed it that day.
People can do what they want, but I'm personally very uneasy about directly exposing my bank accounts, so I use credit cards as a buffer. Moreover, I don't have a lot of faith in banks not engaging in shenanigans that I've seen them do to me before, like transaction reordering, double charging debit transactions, debiting charges immediately, while sitting on deposits for up to a week, etc.
I think ACH is probably worse than debit cards.
We had some sort of discussion here a few days ago (I forget exact topic, maybe Swift?). Someone linked to why Donald Knuth no longer sends checks to people: http://www-cs-faculty.stanford.edu/~knuth/news08.html
It's an old rant, but if anything, things have gotten worse.
We desperately need some sort of cryptographically secure means of moving money. But it can't have all the baggage of Bitcoin.
a) File a police report b) Do an (offline)report and document every transaction I considered to be fraudulent c) Sent these reports to the bank, where they would go thru it (some sort of committee) and if accepted I would be refunded.
Quite-a-hassle, took several hours to do those reports...
(This is Danish/Finnish bank, Danske Bank. I'm no longer their customer)
In Canada the account holder is not liable for fraudulent transactions, whether it is credit or debit... a benefit of our highly regulated banks.
Canadian banking is different from everywhere because the market is protected from foreign competition. It makes Canadian bank stocks good to own, but makes banking expensive and annoying for Canadians.
I hate the banks as much as any red blooded Canadian but it's important to remember that our system is the envy of many other countries.
It's with good reason that the former Bank of Canada governor (Mark Carney) was recruited to head up the Bank of England and also serves as the chairman of the G20's Financial Stability Board.
What? It's very, very clear that this is about fees.
I wonder if that means my TD Bank Visa brand debit card won't work or if it's only Visa credit cards?
So, while dropping Visa is still kind of a big deal, it's not quite as big a deal as it would be in other countries where Visa handles both credit and debit purchases. Certainly Walmart will know how much Interac is used over Visa.
But here's the thing. Interac has no rewards program, and it charges the consumer a flat fee with each transaction ($0.15 I think? I don't know, I stopped using Interac 15 years ago). Yet, Interac is hugely popular.
Meanwhile, we're all paying a hidden 2% tax on everything to cover the credit card interchange fees whether we use a credit card or not. It's a completely unacceptable situation and it's hard not to be on the side of the side of the retailers (even when they propose ham-fisted solutions like CurrentC).
I'd prefer it if merchants could and would line item the exact fee for my specific card for this specific transation, as a line item, just like sales tax.
What we are seeing is a p_ssing contest between two big hitters that has spilled out of the boardrooms. These negotiations happen every day without us hearing a peep. Perhaps I'd be mildly interested if this was a spat between walmart and farmers or some a sympathy-worthy small business, but this is Visa.
that would be excellent, and as a merchant i'd love if it were possible. we save a lot of money by paying a variable rate, so a transaction on a platinum card or something that pays a higher cashback to the cardholder costs us more than a basic card. We don't even know what the processing fee for your transaction was until the end of the month when our gateway provider invoices us.
I was one of the hopeful for a Bitcoin, or another blockchain-based currency, to cut out the middleman, all the while maintaining the convenience of spending my money as I see fit. The middleman are the 5 to 7 companies that touch a credit card transaction from POS to the bank, each taking a small cut. I am confident most HNers probably already know.
Unfortunately the door didn't shut on big credit/transaction processing/bank asses fast enough, so all them have developed blockchain-based instruments to ensure they get a cut of any future transaction that flows. Short of a sudden worldwide adoption of Bitcoin by merchants and consumers overnight, this does not appear to be happening (fingers crossed), I am not sure how the market will take care of the fee situation; I'm not fond of government regulation via caps, since it will hinder other creative efforts to change the system; the disparity is what will drive an innovation (I hope). I think a player willing to take less would start a price war and gain more volume.
The passivity of acceptance of these fees by the majority of consumers without any noise, is similar to how regular paycheck income tax withdrawals are like bleeding people drop by drop; they don't seem to care too much. As opposed to saying, 'Hey we'll take that 28%' all in one chunk on April 15th. People would revolt, or get very angry ;)
So I think it is cool that a big player is shaking up the sleeping giant of VISA and company. I will follow this to see how quickly VISA cuts a deal. I think the Walmart letter paints them against VISA in a good light. In any case, it has brought scrutiny and public awareness to the issue.
https://blockchain.info/charts/cost-per-transaction http://bitcoin.stackexchange.com/questions/32923
I took the equivalent of $250 USD out of a Malaysian ATM with my Bank of America debit card. I was charged a $3.50 ATM fee by the Malaysian bank. BoA charged me $5.00 ATM fee, AND an $11.00 foreign transaction fee based upon the amount. I know they hedge exchange rates, but they already took the $5.00, and $11.00 is a lot more than my Bank of China account charges me 3x less to take money out in the US on my BoC debit card.
My credit card is not too bad, but the merchants are paying fees too on top of the 5 to 7 middlemen. Bitcoin or other would only be an improvement. People make the claim they want a bank to call or email with issues. Well, you cannot even email most issues to BoA. I have tried. You need to call them. They can send you secure messages in online banking that you can reply to, but you cannot initiate an issue.
I'll take the lower, single fee, that although not fully anonymous via tracking, is better than high fees with no real benefits. Trust me, I'm not delusional on this, only wishing for the better deal for me.
...Visa and Walmart have been unable to agree on an acceptable fee for Visa transactions. As a result we will no longer accept Visa in our stores across Canada, starting with our stores in Thunder Bay, on July 18, 2016.....We sincerely regret any impact this will have on our customers who use Visa and remain optimistic that we will reach an agreement with Visa.
This is nothing more than a negotiating ploy to get Visa to cave to Walmart's demands before July 18. No major retailer can afford to stop taking Visa. They may take the hit and carry through with it for a while just to show Visa they're serious, but it won't last very long.
More to the point - a lot of banks offer both Visa & Mastercard, so for most folks it'd be just a case of swapping cards if they don't already have one (if they feel inconvenienced by the lack of Visa payments).
Cashiers will almost assuredly offer a Walmart branded MasterCard or Amex if they were trying to buy with visa.
Bingo- Walmart has both eliminated visas Costs and developed a new revenue stream. And I imagine their quants know how many of their visa customers have alternate credit cards or debit capabilities.
What do you mean? This is like saying "The only reason you use a towel is to get dry", implying "you are a cheater". Yes, towels are to get you dry, and yes, it is "This is nothing more than a negotiating ploy". I don't get why one would use the word "ploy" here as if something cunning that few people notice or understand is happening.
This is a good way to make people notice that at the end of the day, it's the retailer that sells you stuff, not Visa. They merely run a bunch of servers and rent-seek.
That remembers me Steve Jobs, the iPad and flash, when he decided to remove flash video. I recall so many people saying "nobody could tell that to the people, people will demand flash, Apple is screwed".
Turns out they could. Your website needs flash? fine, my millions of high income iPad users wont be able to see it.
Wallmark is not a major retailer, it is THE BIGGEST RETAILER in the world!!
By the way, if Wallmark wants they could "help" people transition to Apple or Google pay. Everybody has a smartphone and the only thing is needed for people to use it for paying is getting used to it.
Wallmark knows now alternatives exist so they can exert some negotiation power.
A long time ago people would routinely slow down lines at supermarket checkouts by performing this ritual: https://en.wikipedia.org/wiki/Cheque
I don't really know how common it is in retail nowadays. It's certainly preferable to card for high value payments. E.g. try paying income tax or property tax by card. It will cost you a certain % extra in fees.
Edit: I forgot about this famous check. Happened a few years ago. I wish I had the assets to be able to hand-write a check for $975 million: https://www.washingtonpost.com/news/post-nation/wp/2015/01/0...
It might surprise you to know that Costco for years only accepted AmEx (and soon will only accept Visa).
I disagree. Walmart is a huge, major retailer. A lot of people who shop there do the majority of their shopping there. As an example, I have an American Express card. Why? Because I was doing most of my shopping at Costco. It's really not that much of a hassle to get a new credit card. Way more of a hassle to not be able to use a credit card (and get sweet, sweet cashback) for the majority of my shopping.
Walmart customers will do the same. I bet a lot of them will already have non-Visa credit cards, which they can simply start using. The rest will either switch to cash or get a non-Visa card. The power is in Walmart's court here. They offer a lot more value to customers than Visa does. I don't care at all what company's name is written on my card, but I do care that it lets me buy things where I want to.
Especially in smaller cities where the Wal-Mart "Supercenter" is the only significant retailer available with a broad selection and late hours.
Customers will continue to be able to use...American Express."
Thought this was funny given that Amex must have the highest interchange & fees. Their statement still makes sense because Walmart is saying Visa fees in Canada are too high compared to their rates in other markets.
Maybe Target will win some market share, but I doubt it. I think customers will switch cards or go cash. Walmart is too good at what they do.
You bet that Walmart negotiated an excellent rate with Amex.
[1] http://www.moneysense.ca/spend/credit-cards/costco-american-...
I'm skeptical, since "cash advance" usually has its own stipulations regarding interest rates, and is capped below your credit limit. All for, what, $150 annually per $10,000 in arbitrage? That's an hour of work for many people here.
There's no Target in Canada.
Seems to vary. e.g. My local coffee shop puts a surcharge on all card transactions...except Amex. And thats in freakin europe...so there are definitely case by case deals going on.
* please don't complain that jobs and profits are going abroad if your country won't do business with foreigners. It is often hard to order products from US because almost nobody ships abroad (Amazon does, but not all products). Anyway, this is off topic, sorry about that.
"Visa and MasterCard each charge 1 percent of purchases as a foreign transaction fee. Most banks add an additional 1 percent or 2 percent, leaving your total fee at 2 percent or 3 percent. "
All those promotion gimmicks they give to people to sign up for the cards, and all the spend-this-get-this-gift are all cheaper than the fees. Go figure.
Just like the cost of paying by any other mean is. Cash or cheque payments are not free.
"By screwing us on the kinds of transactions we make the most of you're hurting our profit margin and giving us less wiggle room to undercut the competition by offering lower price. Therefore screw you, we're not taking your cards. Oh and BTW we hold the moral high ground because we serve the poor"
-IIRC the vast majority of prepaid bank cards use the Visa network.
-The vast majority of bank cards are issued by employers who don't want to deal with the costs associated with paper checks (not a bad thing by itself).
-The vast majority of prepaid bank cards are issued to people without bank accounts (i.e. poor people) and have shit terms (which is a different issue).
-Poor people typically buy lower priced, lower margin goods and make transactions for smaller amounts.
-Walmart moves a ton of lower priced merchandise relative to the amount of higher priced merchandise they move.
-Even at a fixed profit margin per dollar, the more small transactions are made the lower the profit margin (because 100 people buying 1 $1 item takes more cashier time than 1 person buying 100 $1 items).
-IIRC payment networks usually have a fixed minimum cost of a few cents or have cost brackets based on transaction size.
Therefore Walmart's statement makes sense (or maybe their PR people are really good at their jobs and I analyzed that exactly how they wanted me to).
https://www.wbez.org/shows/wbez-blogs/why-dont-illinois-secr...
The link mentions that Indiana had the same problem but they paid the fee because Customer Service was more important.
Which country is that? And are discounts allowed?
I have seen this condition as a contractual requirement by Visa&MC - in essence, you either comply and have the same prices for cards as for cash, or you don't get a merchant agreement and cannot take cards at all. And the country-by-country difference was a simply a result of their anti-trust laws, whether the card network is free to impose such a condition or forbid you from accepting cards, or if such restrictions are treated as anti-competitive and the merchant is free to choose.
This give this the appearance of being part of a negotiation. "Part" could also mean "drop the mic and walk away."
Probably, Walmart and other retailers just eat the cost of the Amex retailer fee because it's a relatively small fraction of transactions; plus, there's a competitive advantage to accepting a wider range of plastic.
That depends which card and/or program you're using. Just like every other CC provider.
You live with your choice.
> and I can't get
You try to look harder for other options.
Walmart believes, probably correctly, that people like you shopping elsewhere will be the lesser effect compared to the difference in transaction fees to Visa.
Nope. Hardly anywhere will accept cheques anymore.
Or you know, use cash. Don't shop at walmart. That sort of thing.
Can't get too much more simple than that.
It sounds like it was more simple than that when you could have just paid with Visa.
> (...) requires us to keep costs as low as possible.
Sounds pretty to-the-point to me. Remember that for 'budget' stores and chains the bottom line should translate directly to customer benefit (ie. lower price).
An added anecdote: I've run a startup with high-priced goods/services with low profits and card expenses are a huge PITA and will cost you a considerable amount of money.
We model credit worthiness largely on past payments of credit; which means that we are incented to use the system.
I don't see using my credit card as really "using credit." I use it as a charge card and pay every bill as it comes; so it's merely a (30-59 day) float. I, of course, have a difference financial capability than much of the US, and recognize that privilege. For many people, CC float is what let's them live paycheck to paycheck and is the first brick in Americans penchant for debt.
That being said; there is a huge benefit to many consumers having a short term credit facility. It's as if the CC industry made a micro loans initiative. (And then proceeded to abuse it).
Regardless of debit or credit the CC company always has responsibility if there is fraud. With debit I might risk having an empty account for a longer period of time after an incident though (Refunds might take a while).
> How do you pay the rent?
I'd use credit.
For consumers, credit vs debit is in theory about the same, in practice it's slightly different. The main difference though is consumer vs business. A business debit card attached to a checking account, is the same problem with fraud as the checking account itself, the burden is almost entirely on the business not the bank.
You must be speaking of something different such as "Visa electron" debit cards.
How is spending your own cash an advantage over spending someone else's?
No you don't. You only get it for online authorizations.
(And we actually have problems when visiting USA because some of our banks issue credit card with numbers printed instead of embossed.)
In these cases your issuer will learn about these transactions when the nightly batch job finishes. I don't think you want to get an SMS at that time.
Even if the authorisation is successful the final transaction may not happen, may happen at a different time or may happen over a different transaction amount.
Honestly I have no idea why I got downvoted.
Retailers eat the cost in order to get the customers. Cc processors earn the cost. Banks, in order to get customers, pass some of the dough back to consumers in marketing and rewards.
So it's somewhat fairer now than it was ten years ago with similar fees but less rewards. But an economist would say that optimal would be to massively reduce fees and take away rewards.
In practice, that means you're paying more to the merchant, possibly quite a lot more in some cases. That 1-3% rebate is going to translate quite directly into a 1-3% increase in sticker price. That lack of liability if your card is lost or stolen is essentially a mandatory insurance scheme with everyone paying a premium on sticker price to fund it.
It's really no different to, say, all those offers to buy something on-line but then return it for a full refund if you don't like it. In industries like clothing, a significant fraction of customers will abuse this by doing things like buying some nice clothes, actually wearing them once or twice, and then trying to return them. Often the return will be accepted even though the merchant knows very well that the clothes have actually been worn and they can't restock them, because it's too much trouble to argue the point. The bottom line is that if you're that abusive customer then the refund deal is great for you, but everyone else is paying higher prices for your clothes to cover the merchant's wastage due to abuse.
Of course there are other advantages to digital payment in terms of keeping records of what you spent (and potential disadvantages in terms of privacy if others have access to those same records) but to me that's a separate issue to the direct financial implications of paying by different methods.
It shocked me a little during my first shopping, that I could pay only in cash in Switzerland.