this post was submitted on 24 Sep 2024
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[–] noredcandy@lemmy.world 17 points 2 months ago (6 children)

Fwiw debit card transaction are capped around 21 cents per transaction depending on the size of the bank holding the account. You’re right for credit cards though. Also, imho, I’ve never seen merchants pass along these debit card savings to the consumer. With they would though.

[–] vrek@programming.dev 10 points 2 months ago (2 children)

A liqor store near me offers 5% off if you use cash or debit.

[–] girthero@lemmy.world 3 points 2 months ago (1 children)

This also became trend for locally owned restaurants around me recently. From pizza shops to fine dining.

[–] ShepherdPie@midwest.social 1 points 2 months ago (1 children)

Whenever I see a restaurant or other small business doing this, I always assume it's to hide revenue and avoid taxes.

[–] girthero@lemmy.world 1 points 1 month ago

In the past I thought the same, but combined with recent inflation I can see why restaurants want to pass on a discount to the consumer.

[–] ByteOnBikes@slrpnk.net 5 points 2 months ago (1 children)

I've never heard of that cap! Any references.

Also, imho, I’ve never seen merchants pass along these debit card savings to the consumer. With they would though.

Gas stations do! But not really passing the savings, just flipping it by penalizing credit cards.

They can easily say, "Actually it's 0.10 off by using a debit" as opposed to "it's 0.10 more for using credit".

[–] noredcandy@lemmy.world 5 points 2 months ago (1 children)

From the federal reserve directly : https://www.federalreserve.gov/aboutthefed/boardmeetings/frn-reg-ii-20231025.pdf Also, I guess what I meant is, the cap used to be 45 cents, and when it was reduced to 21 cents, there wasn’t some massive reduction in prices of products for consumers. Merchants just pocket that difference.

[–] Thassodar@lemm.ee 1 points 2 months ago

Some liquor stores near me give a slight discount for cash or debit, and WinCo is cash or debit only to avoid these fees I'm sure.

[–] jh34@lemmy.world 1 points 2 months ago

Those truck stops that have the X gas price for cash Y gas price for credit (x < y) are a good example of a merchant passing the savings onto consumers. More niche is all the coin shops I've been to pass the fee onto you if you use a card.

[–] militaryintelligence@lemmy.world 1 points 2 months ago

Our transactions cost 3 dollars per 100 spent

[–] booly@sh.itjust.works 1 points 2 months ago (1 children)

Yeah, you can think of it as a simple transaction fee for debit transactions, and a full blown credit and risk shifting system for credit transactions. The banks charge high fees for credit transactions because they're actually lending money and bearing some credit risk for them, whereas the debit transactions are just moving money from one account to another.

[–] noredcandy@lemmy.world 2 points 2 months ago

Banks charge higher fees for credit transactions to fuel the loyalty programs (flyer miles, cash back, etc) on those cards. This is why you no longer get any loyalty benefits on debit cards but you still do on credit. The fees don’t cover the risk on credit cards , the interest does.

[–] Mataresian@lemmy.dbzer0.com 1 points 2 months ago

Whether they directly pass the costs or indirectly, these are still costs made by the seller. In other words either the costs are passed on by the credit card customers or simply all customers. Somebody has to pay for the costs and in the end the seller has to make some profit to survive.