Federal Financial Reform: No More Debit Card Purchases For Your Lunch. Cash Only.

[Obama 2012 1,714]

Damn. Looks like I'm going to have to remember to start keeping cash around again... booo!

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http://abcnews.go.com/Business/article/financial-reform-bill-means-big-consumers/story?id=11012343&page=2

New Debit Card Rules

Merchants have complained for years that Visa and MasterCard's rules about debit cards put them at a disadvantage. The reform would address many of these complaints, giving store owners a victory over card issuers, and to some extent over consumers.

Store owners would be allowed to set minimums on credit card transactions – up to $10 -- which they are currently not allowed to do. For consumers, this likely means no more $1.50 packs of gum, which can cost the vendor more than $2 in swipe fees.

"Consumers may feel some sympathy on this issue, but if you take away their ability to use their cards anywhere, anytime, they're not going to be happy," says Gerri Detweiler, a credit advisor at Credit.com.

The bill would also allow the Federal Reserve to make sure that card issuers are charging "reasonable and proportional" fees, which is likely to bring down costs to store owners, and potentially could also reduce prices for consumers.

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Other 5 Major Changes can be found here: http://abcnews.go.com/Business/article/financial-reform-bill-means-big-consumers/story?id=11012343&page=1

[SMR 368]

Damn. Looks like I'm going to have to remember to start keeping cash around again... booo!

-------------

http://abcnews.go.com/Business/article/financial-reform-bill-means-big-consumers/story?id=11012343&page=2

New Debit Card Rules

Merchants have complained for years that Visa and MasterCard's rules about debit cards put them at a disadvantage. The reform would address many of these complaints, giving store owners a victory over card issuers, and to some extent over consumers.

Store owners would be allowed to set minimums on credit card transactions – up to $10 -- which they are currently not allowed to do. For consumers, this likely means no more $1.50 packs of gum, which can cost the vendor more than $2 in swipe fees.

"Consumers may feel some sympathy on this issue, but if you take away their ability to use their cards anywhere, anytime, they're not going to be happy," says Gerri Detweiler, a credit advisor at Credit.com.

The bill would also allow the Federal Reserve to make sure that card issuers are charging "reasonable and proportional" fees, which is likely to bring down costs to store owners, and potentially could also reduce prices for consumers.

---------

Other 5 Major Changes can be found here: http://abcnews.go.com/Business/article/financial-reform-bill-means-big-consumers/story?id=11012343&page=1

Store owners aren't allowed to set minimums on credit/debit card purchases? I see it all the time.

[Jewel-8 21]

The bill would also allow the Federal Reserve to make sure that card issuers are charging "reasonable and proportional" fees, which is likely to bring down costs to store owners, and potentially could also reduce prices for consumers.

---------

Other 5 Major Changes can be found here: http://abcnews.go.com/Business/article/financial-reform-bill-means-big-consumers/story?id=11012343&page=1

This I agree with!! It is hard for someone to run a business and accept credit cards when the card processing companies charge for every little service they provide. The nickle and diming comes out of nowhere and some even have hefty cancellation fees in the $200-$500 range.

[DukeOfYork 28]

Store owners aren't allowed to set minimums on credit/debit card purchases? I see it all the time.

Me too. I guess a lot of businesses out there were/are breaking the law.

[Peikko 1,575]

You are being screwed if your fees cost $2 for a $1.50 transaction

Some companies are pretty tough, but it's normally a % (less than 2%) and sometimes a per item fee, which can be as much as $0.25 but should be nearer to $0.10. Of course if you only transact $1.50 in a month, well that'd hit you hard!

[IndigoSkies 168]

It doesn't cost $2 to run a credit card or debit card. It costs about 2%. If you buy a pack of gum and it costs 1.50, the merchant is expect to pay 3 cents to the credit card company. CC companies hedge against small purchase by having minimum monthly fees.

[Usui Takumi 1,562]

I was charged .50 for my debit card yesterday.....so that was illegal?

[Ban Hammer 13,644]

I was charged .50 for my debit card yesterday.....so that was illegal?

no, i think 50 cent is a usc.

[Jewel-8 21]

no, i think 50 cent is a usc.

[Hilarious Clinton 452]

Store owners aren't allowed to set minimums on credit/debit card purchases? I see it all the time.

They aren't supposed to charge a fee for CC use either. Buy they do it anyways.

They are allowed to give a discount for cash.

[Ban Hammer 13,644]

They are allowed to give a discount for cash.

that's what i'd like to see more of.

[SMR 368]

that's what i'd like to see more of.

Me, too. I know the stores are getting hit when I use a CC. But until it makes a difference to me, I'll use my credit card for the couple cents that I get back per purchase. Anywhere that gives a cash discount I pay cash.

[evli1966 88]

Store owners aren't allowed to set minimums on credit/debit card purchases? I see it all the time.

No they are not it is actually against their processor contracts; at least here in the states.

Most places that do are mom and pops stores/ restaruants and shady gas stations.

[evli1966 88]

You are being screwed if your fees cost $2 for a $1.50 transaction

Some companies are pretty tough, but it's normally a % (less than 2%) and sometimes a per item fee, which can be as much as $0.25 but should be nearer to $0.10. Of course if you only transact $1.50 in a month, well that'd hit you hard!

It comes down to how well your company has negociated the contract with the processor.

many processors will claim a cheap rate based on interchange fees and slam you with settlement fees.

others processors will have a high percentage above interchange and have almost 0 settlement fees

Others will only allow you to use their lease equipment with high lease costs and low interchange fees and settlement fees.

get the trend?

Some will allow discounts for the opportunity to process your gift cards.

Your large fast food chains typically pay 1% over interchange and somewhere in the range of .30 - .50 to settle the transactions.

They will run entire shifts on QSR(Quick Serve Restraunt) then at the end of the shift they will do 1 settlement of all the transactions.

They can do this becasue Visa, MC, Discover have a QSR clause that allows no signature for under a certain amount. (the chain I work for the amount is $25). With this clause if a transaction is bad then it is covered by the CC or processor. American Express does not allow this it is some how an agreement with their customers that every transaction should have a signature.

This reform is a BAD idea I would say that in the fast food industry 40-60% of all transactions are by debit/credit.

I for one carry cash for only emergencies and due to traveling fnd it easier to utilize my credit cards; which re paid off on a bi weekly basis.(this is another topic but even paying off a credit card every 2weeks you could be charged finace and interests charges unless you let the card sit for 30 days before using again.)

[Peikko 1,575]

It comes down to how well your company has negociated the contract with the processor.

many processors will claim a cheap rate based on interchange fees and slam you with settlement fees.

others processors will have a high percentage above interchange and have almost 0 settlement fees

Others will only allow you to use their lease equipment with high lease costs and low interchange fees and settlement fees.

get the trend?

Some will allow discounts for the opportunity to process your gift cards.

Your large fast food chains typically pay 1% over interchange and somewhere in the range of .30 - .50 to settle the transactions.

They will run entire shifts on QSR(Quick Serve Restraunt) then at the end of the shift they will do 1 settlement of all the transactions.

They can do this becasue Visa, MC, Discover have a QSR clause that allows no signature for under a certain amount. (the chain I work for the amount is $25). With this clause if a transaction is bad then it is covered by the CC or processor. American Express does not allow this it is some how an agreement with their customers that every transaction should have a signature.

This reform is a BAD idea I would say that in the fast food industry 40-60% of all transactions are by debit/credit.

I for one carry cash for only emergencies and due to traveling fnd it easier to utilize my credit cards; which re paid off on a bi weekly basis.(this is another topic but even paying off a credit card every 2weeks you could be charged finace and interests charges unless you let the card sit for 30 days before using again.)

I know very well how the processor/merchant contracts are negotiated, but thank you anyway.

P.S, if you do do your homework, there are processors out there who are fair.