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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: 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.