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posted by chromas on Saturday September 29 2018, @12:40PM   Printer-friendly
from the BuT-mUh-FrEe-ReWaRdS! dept.

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.


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  • (Score: 0) by Anonymous Coward on Sunday September 30 2018, @12:08PM (1 child)

    by Anonymous Coward on Sunday September 30 2018, @12:08PM (#742056)

    Australia Post does this.
    When they first bought out their 24/7 Parcel Locker service it only required a minimum amount of information. Then they spent millions from the government to create the MyPost system which is yet another large database with people's real names, DOB, licence and passport information. Yet another huge honeypot in yet another government organisation with no business collecting this type of information.
    When I went in to collect a parcel a while back from my parcel locker it said I couldn't. I was not verified. At the counter they said I needed to give them information to prove who I was. I said I had been using the service for some time, so what was the problem.
    The person said they needed an address and licence information. I asked why this was required, just to pick up a parcel from an existing locker. When the address information was being provided the Australia Post teller person started typing it into the computer. I asked why. I looked around at the screen to see the information being typed into their database to create an AusPost account. I asked why. The teller said it was required.
    I called bullshit. I said they don't require to collect all of that information and create an account in their database just to collect a parcel.
    In the end they didn't create an account. The parcel was collected.

    I wonder how many people gave their information to Australia Post thinking that they were required to.

    They do just love to collect people's data nowadays. I wonder what they do with it.

  • (Score: 2) by Runaway1956 on Sunday September 30 2018, @02:36PM

    by Runaway1956 (2926) Subscriber Badge on Sunday September 30 2018, @02:36PM (#742084) Journal

    Let me just double check what seems obvious. Here in the states, we have "Post Office Boxes", which you can use as a mailing address. You're given a key to fit the mailbox, and as long as you pay the periodic fee, you can continue to pick up mail as it arrives.

    It seems almost obvious that your "Parcel Locker" is the same as our "Post Office Box".

    Among the advantages of a POB, when you are away from home, the mail doesn't stack up at your front door, advertising to potential burglars that the house is unattended. Also, a homeless person, or a person who doesn't live on a regular rural route can get mail at a POB. I've used POB's in the past, they can be very convenient. Oh - another advantage is, you don't want every Tom, Dick, and Hairy you might correspond with to walk up to your front door. You might be ambushed at the post office, but they can't find your house without an address.