You mean the merchant pays a higher fee when you use one Visa card vs. another Visa card? Or you mean compared to Mastercard etc.?
https://www.helcim.com/us/visa-interchange-rates/
https://usa.visa.com/dam/VCOM/global/support-legal/documents...
1) You buy a product with your Visa debit card and enter your pin
2) You buy the same product, same card, but don't enter your pin
3) You buy the same product, same card, but your card won't swipe so the cashier manually enters your card number
Each of these scenarios will likely result in different fees to the merchant.
> if I'm buying two of the same product (obviously -- I'm not talking about two gas vs. groceries here) with two different cards, both of which are from the same network and the same "kind" (by which I mean the categorizations listed above, like two that are both "Visa Rewards Signature"), then the merchant will pay the same fee, right? i.e. it's not like the mere fact that one pays 1% cash back and one pays 2% cash back could possibly result in a different charge to the merchant by itself if they're both (say) lumped together as Rewards Traditional?
The same card means the same perks. You're describing two different cards. They may be similarly branded. But they're different cards to the interchange and different cards (from a rewards perspective) to the consumer.
If you think someone is "avoiding the question," it might be you're miscommunicating.
At what point should you start to suspect that the issue is not on the client side, but the server?
After I see myself being at least quoted accurately? I repeatedly wrote "same kind of card", and I was quoted as asking about the "same card". That is my fault?
Visa Signature card with 2% cash back ("A") is a different card from Visa Signature with 5x ("B"). They're just similarly branded. The text or design on the card is independent from the card itself, which is defined with an alphanumeric code within the interchange system.
In short, a merchant swiping A may be charged differently from the same merchant swiping B.
"Visa Signature" is a marketing term. In fact, two cards with the same perks and branding could have different fees. There are something like 300 kinds of interchange fees that are always being negotiated between lots and lots of parties.
The one example I know is tied to the WaMu-Wells Fargo merger. WaMu's cards were rebranded as Wells Fargo products. But old interchange agreements remained. So two identical-looking cards, with identical perks, would swipe differently for a merchant. The only clue to the customer would be the different bank identification numbers (the first few digits of a card).
If you look at the four columns in section C, there are four rates. Signature Preferred, Signature, Traditional, and "All Other".
If I sign up for merchant card processing, and select a plan that varies the rate I pay based on card, then I'm given a fee schedule like this [2]. The holographic logo on the card matters. If it says "Visa Signature", then I pay that rate. Regardless of how the customer's issuing bank decides to perk their cardholder.
[1] https://usa.visa.com/dam/VCOM/global/support-legal/documents...
However, what I find important here is that the card still is, in fact, categorized by those classes, and that categorization is merely misreported to the consumer. As far as the merchant is concerned, though, it really is a Signature card that was swiped(/inserted), and that Traditional vs. Signature classification still really is the only thing determining the rate -- i.e., what the card's perks or issuer are still cannot affect the fees once the merchant knows whether the card is truly a Signature or a Traditional card. See what I mean?
A card is “really” a collection of contracts. A bunch of cards are collectively referred to as a “card type,” for merchant billing purposes. It’s nice when that aligns with the card’s marketing, but nothing requires it. Each payment network has its own conventions, which have changed over the years, and are constantly interacting with hundreds of layers and parties. Nobody prioritises keeping brand and type name correlated.
Banks regularly change perks and rates, and when they do, they tend to renegotiate payment fees. Remember, there are like 300 fees. So in these renegotiations, some cards may end up one way and some may another. These are classified as whatever and life goes on. The “real” thing to the merchant is the mapping from card to type. The “real” thing to the bank is the fee flow. The “real” thing to the customer are the branding and perks.
This is exactly what I'm trying to understand: how specific/granular the "card types" can be. Maybe another way to ask it is the following: is there a pre-set list of "card types" with pre-set merchant fees provided by Visa/MC/etc. that issuers must choose from (whether Rewards Traditional vs. Signature, or something else) and that merchants can expect, or do issuers get to come up with their own distinct "card types" that result in different fees for the merchant?
The latter. There are presets for smaller institutions. But these fees and labels are negotiated and renegotiated between big banks and payment networks.
If JPMorgan wants to call their cards with a prime last two numbers KOOPA and pay Visa 1¢ extra for all KOOPA swipes, that would be valid. Nobody does this. Because marketing terms--at least initially--tend to correlate to the perks the issuer is giving cardholders, and thus tend to correlate with the issuer's costs. But that's all.
I was once at a smaller restaurant and they didn't want to take my Amex for fear of fees, little did they know my Visa Infinite had an even higher swipe fee.
If you're talking credit cards, I don't know anyone that discriminates against the different types but it is very possible because you can get that info from the PAN.
Yes
> I don't know anyone that discriminates against the different types but it is very possible because you can get that info from the PAN.
Yes, this was my question, i.e. I'm wondering if merchants can be charged different rates for the same kind of card (e.g. for Visa signature credit cards coming from different issuers or having different perks) consistent with contracts/laws/other practicalities, not just from a strictly technical standpoint. (Any what the relevant reasons might be.)
For a large retailer like Kroger, there's no way in hell they're leaving all the interchange discounts on the table.
Per VISA's website:
"Merchants do not pay interchange reimbursement fees—merchants negotiate and pay a “merchant discount” to their financial institution that is typically calculated as a percentage per transaction."
https://usa.visa.com/support/small-business/regulations-fees...
It seems logical that VISA doesn't want merchants to be able to determine per-card costs, since this keeps merchants from trying to optimize their fees.
> Our cost-plus pricing helps you save.
Thet's Helcim's model. They charge whatever their own cost is, plus a margin.
And you can bet that any merchant as large as Kroger won't accept a flat rate or fee for their transactions. They want to pay as little as possible.