SoylentNews is people
SoylentNews
Shoppers Love Rewards Credit Cards. Retailers Hate Them.:
Large merchants including Amazon.com Inc., Target Corp. and Home Depot Inc. are pushing for the right to reject some rewards credit cards, which typically carry higher fees for merchants. They are likely to opt out of a roughly $6.2 billion settlement Visa Inc., Mastercard Inc. and several large banks recently reached with merchants and continue to make their case in court, according to people familiar with the matter.
The retailers are trying to end the card networks' "honor all cards" rule, which requires merchants that accept Visa- or Mastercard-branded credit cards to take all of them. If merchants could pick and choose among Visa or Mastercard credit cards, those with the highest merchant fees -- and most generous rewards -- likely would be on the chopping block.
The stakes are high all around. Rewards credit cards such as JPMorgan Chase & Co.'s Sapphire Reserve, Capital One Financial Corp.'s Venture and Citigroup Inc.'s Double Cash are wildly popular among consumers for their perks like cash back, airfare and hotel stays. Some 92% of all U.S. credit-card purchase volume is currently charged on rewards credit cards, up from 86% in 2013 and 67% in 2008, according to estimates from Mercator Advisory Group Inc., a payments research and consulting firm.
Yet merchants say the most generous rewards credit cards with the highest fees are cutting into their profits. When shoppers pay with Visa or Mastercard credit cards, merchants are charged interchange fees that are set by the card networks and funneled to the banks that issued those cards. These "swipe" fees vary widely, but are higher on rewards credit cards -- sometimes around 3% of the cardholder's purchase price.
Card networks say preventing merchants from picking and choosing among credit cards creates a frictionless experience for consumers. They argue their rule also creates an even playing field by making sure credit cards issued by banks large and small are accepted.
"If a merchant agrees to accept Mastercard, there cannot be any discrimination between different issuers' cards or between different types of cards issued by one financial institution," a Mastercard spokesman said.
"Visa believes consumers should always have a choice in how they pay, including being allowed to use their Visa credit card regardless of the card type or issuer. When consumer choice is limited, nobody wins," said a Visa spokeswoman.
[...] Visa and Mastercard premium credit cards charge some of the highest interchange fees, often north of 2.1% of the purchase amount, compared with roughly 1.2% to 1.7% on nonpremium credit cards.
[...] For some merchants with lower margins, like grocers, the fees can have a big impact. Kroger Co. unit Foods Co Supermarkets stopped accepting Visa credit cards in August after the two companies failed to reach an agreement on swipe fees.
Kroger Chief Information Officer Chris Hjelm said in an interview at the time that the growing use of rewards credit cards factored into the decision.
(Score: 0, Troll) by Whoever on Saturday September 29 2018, @02:28PM (14 children)
You are using cash? Why not a credit card, with the free loan it gives and the possible benefits (as described in this article)?
Is your credit that bad? Can't you trust yourself to pay off the credit card bill each month? Or is your employer paying you though one of those systems which border on illegal, because they are tied to a card, which really doesn't allow you to get all your cash out?
(Score: 3, Insightful) by maxwell demon on Saturday September 29 2018, @03:33PM (13 children)
The reason was given right in the post you answered to.
The Tao of math: The numbers you can count are not the real numbers.
(Score: 2, Insightful) by Whoever on Saturday September 29 2018, @03:46PM (11 children)
If he lived in CA, he would be wrong about the tracking.
In CA, retailers are not allowed to store the name on the card -- only the number. So, his card could be tracked, but seriously, who cares? Yes, the data is valuable, but, if the retailers can't track it to a name, who cares?
(Score: 5, Insightful) by martyb on Saturday September 29 2018, @04:22PM (3 children)
I am not familiar with the details of the law in California, but my initial reading of this suggests the retailers are forbidden from tracking the user's name on the card with the card number. Are data brokers (e.g. Equifax) forbidden from matching these? There are many MANY avenues for data brokers to gain access to data, for a fee, from a huge variety of sources. Department of Motor vehicles - Match name to license number and address. Merchants - credit card number to items purchased. I would be surprised if credit card companies did not sell a mapping from credit card number to card owner. A few foreign keys and joins in a database and it's all the same to them.
I prefer to use cash whenever possible... AFAIK, bank ATMs do not track serial numbers on cash to whom it was issued? I've heard rumors about such being the case, but have never found a reputable link.
Wit is intellect, dancing.
(Score: 2) by Whoever on Saturday September 29 2018, @04:30PM (2 children)
Equifax doesn't have individual transaction data.
The card issuer probably has the most information, but the issuer doesn't know what you bought -- only where and how much. I would be surprised if banking laws allowed them to sell account details that would allow matching of names to specific credit card transactions, but who knows.
All of this tracking should be legal under Runaway's Libertarian philosophy.
(Score: 3, Interesting) by Runaway1956 on Saturday September 29 2018, @06:01PM
I guess you realize I lean Libertarian, but I'm not a real Libertarian. They have good ideas, but they don't have all the answers.
As for the tracking of "consumers" - yeah, people would have some kind of "right" to track my purchases with a card - IF I had agreed to that tracking. I don't agree with it. Millions of my fellow Americans agree to it. And, I think they are stupid to do so.
Any more questions?
(Score: 2) by martyb on Saturday September 29 2018, @08:37PM
You might want to take a look at this: https://en.wikipedia.org/wiki/Card_Transaction_Data#Card_transaction_data_levels [wikipedia.org]
I know that American Express, for one, has for many years provided year end summaries to card holders. These list charges broken down by how much of each transaction was attributable to different categories (office supplies vs dining vs groceries, etc.)
In the current economic and business climate, I cannot imagine credit card processors passing up a possible additional revenue stream. I certainly assume that this IS already taking place, and behave accordingly, instead of hiding my head in the sand and hoping they have not done so. There's just too much financial incentive for me to assume otherwise.
Wit is intellect, dancing.
(Score: 5, Insightful) by maxwell demon on Saturday September 29 2018, @04:57PM
Well, to find the user name of one person that cares, look at the original post.
You may not care, but then, the OP didn't claim that you do.
The Tao of math: The numbers you can count are not the real numbers.
(Score: 3, Interesting) by Runaway1956 on Saturday September 29 2018, @06:10PM (4 children)
When the law goes looking for someone in Cali, does the law not contact the card issuer, and request that they be informed when that card is used?
I didn't specify exactly WHO tracks you, or for what purposes. I stated that ALL cards provide SOMEONE with details about you, which you may or may not prefer that they have. I don't want Young's grocery to track me anywhere at all, nor do I want my druggist to track me, or Amazon, or the law, or anyone else. I prefer that each and every transaction that I make with any vendor is an isolated, unique transaction, with no outsiders looking on. I cannot have my preference, so I limit any tracking, as much as possible, by using cash. If the bastards are tracking me, I want to make it more trouble than it can possibly be worth. That goes for EVERYONE - any government agencies, any vendors, any data brokers, or, even the wife or kids.
I probably have a leash on me, like most other Americans, but I think my leash is easier to slip than most American's leashes are.
(Score: 2) by Whoever on Saturday September 29 2018, @07:23PM (3 children)
Are you immune to tracking through license plate readers?
(Score: 2) by Runaway1956 on Saturday September 29 2018, @07:34PM (2 children)
I am not always at the same place as my license plate. And, if I were dodging the law, I can guarantee that I would not be found real close to my license plate. Incidentally - have you ever wondered who might have access to that license plate data, besides the police?
(Score: 2) by Whoever on Saturday September 29 2018, @08:31PM (1 child)
That was my point. Private entities are scanning license plates.
(Score: 2) by Runaway1956 on Saturday September 29 2018, @10:03PM
Yes, and they've gone at least a 1/2 step beyond that. They are now correlating bumper stickers, damaged areas of the vehicle, and any other identifying information. License plates can and do change in most states (in Texas, when you sell a car, the plates go with the car, you never remove the plates until the car is being crushed for junk) but other identifying details may stay forever. For instance, I have a vinyl sticker in my back window that only a few hundred other people in the United States might also be displaying. Thousands might display similar stickers, but very few would display the one I have. Another person might have a broken window, which they have semi-permanently repaired with some plywood and duct tape, or plastic and duct tape. Those very expensive skinny 20+ inch wheels that the kids like help to make the vehicle distinguishable to cameras as well as impressionable young women. Data, data, data.
(Score: 3, Informative) by fido_dogstoyevsky on Sunday September 30 2018, @12:39AM
Pity about the card issuer, though. They don't just get the name but all the transaction history - the product (ie the card user) doesn't get a say in what gets done with that information.
It's NOT a conspiracy... it's a plot.
(Score: 2) by Whoever on Saturday September 29 2018, @04:24PM
To add a little more: why do you think those retailers offer loyalty cards and give discounts when you use them?
It's because they get a lot more data when you present the loyalty card than when you just use a credit card. Credit cards alone don't allow much tracking.
Get a new credit card and all their tracking data is now useless.