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Comment by gsharma | Hacker News Reader

If my math is correct: 2.75% of $10B/yr = $275M/yr. Although they may not be charging 2.75% across whole $10B. I don't think Starbucks would pay 2.75%.

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Don't forget that the credit card companies get most of that.

They have to give most of that to the credit card companies. I am not sure how much of the 2.75% they get to keep but I would guess less then half, maybe even only a quarter?

I remember reading somewhere the average swipe fee is 1.6% for cards. Don't know how accurate that is but I'm assuming it's not far off.

You're pretty close to the mark - at least for a company doing that much payment volume. Maybe closer to 1.8% or so. There's dozens of variables (debit vs credit, issuing bank, network, international, chargeback rates, etc...) so it's hard to say with any reasonable degree of certainty.

There's a higher fee for "Card not present" transactions.

Square is card present though.

It actually is more like $200mm gross (due to discounts, and that's run-rate, not 2012 I think), and then goes to Chase Paymenttech and to the card associations, interchange, issuers via chase -- as well as all their other costs. So I think netting $50mm off the transactions is generous.

They have at least 500 employees -- figure $100k/ea loaded cost, only possible since I think a lot of those employees are not engineers. That's all of it right there.

They really need to be in the 50b/yr range to be doing well. OTOH, they will probably get there in a year or two, and I don't see their costs going up much.

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