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Comment by morsch | Hacker News Reader

I don't think it's stupid that it costs money, but I am surprised fees are still as high as they are. I suspect it's got something to do with how opaque the processing fee is for the customer.

If I understand it right, merchants often aren't allowed to pass on the fees or (much the same thing) give discounts if you chose a cheaper payment option. No wonder there's little competition on the fees, and Visa[1], Mastercard[2] and PayPal[3] are all having record profits.

[1] https://www.cnbc.com/2017/10/25/visa-quarterly-profit-rises-...

[2] https://www.reuters.com/article/us-mastercard-results/master...

[3] https://www.reuters.com/article/us-paypal-hldg-results/paypa...

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Merchants absolutely can pass on the fees or give "discounts" for cash, at least in the USA. Gas stations are one of the major businesses that practice this.

Anecdotally, I worked at a company store years ago where we would charge customers paying with cards a 2.75% fee, which is what we were paying. And that store was operated by a Fortune 500 company.

Also, virtually every small private business I go to in Los Angeles charges some fee, or has stipulations, for credit card transactions.

This wasn't originally the case. Passing on the fee was for a long time against most merchant agreements. Which makes sense from the credit card company's point of view: they don't want shoppers to have any reason not to whip out the card.

The big change came in January 2013 after a big court judgment. Adding fees, though, is still illegal in some states: https://www.creditcards.com/credit-card-news/business-surcha...

Thanks for that link.

Made me wonder about the stores/restaurants I frequent here that do charge, apparently they're still ok to do so after 2015(link from the comments in your linked post): https://oag.ca.gov/consumers/general/credit-card-surcharges

Where? I haven't seen any in years, at least in the southeast.

There are more stores not accepting credit cards than charging extra.

Maybe I should've mentioned "Los Angeles" higher in my comment, but looking at the sibling comment to yours, apparently there are plenty other states where it is legal to pass on the fees as a surcharge as well. Obviously your situation may vary.

In London, there's quite a large number of merchants who have now stopped accepting cash - requiring cards/NFC only.

PayPal fees are high because 1) people pay it and 2) fraud.

Credit card "processing fees" however are high because of the stupid rewards programs that Americans are so addicted to because it makes them feel like they are "sticking it to the man" and getting money back, to the point of having dozens of plastic cards in their wallet. Of course with processing fees at >1% of gross value no cashback or airline miles program is ever going to make you come out ahead.

In the EU there are no silly rewards games and fixed processing fees of at most 0.3%.

In places like the EU and Australia, credit/debit card interchange fees are capped very low (like 0.3% low).

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