Posted on 07/02/2011 11:23:11 PM PDT by Rabin
The average swipe fee in America is 44 cents, the highest rate in the world. The Federal Reserve said that banks could make profit 12 cents per transaction and under the Dodd-Frank "financial reform", planned to enforce this cap starting yesterday.
“is roughly double the 12 cents tentatively proposed by the Fed last December.”
I’m not sure why the Feds should have any say in this whatsoever. Why can’t the market set the fee?
You tall the Banks they can only charge 12Cents per swipe.
The dig the consumer. How about a $35.00 a month charge to you? Government intervenes you get hurt I guarantee it!!!
Thank you so much for the link!
12 cents was doable, but they’ve cut that roughly in half.
I agree that government price controls never work, and never will. However, the banks were charging exorbitant fees for them to have the pleasure of offering credit.
Have you ever had a teen in your home receive a credit card without your permission?
The cap on fees is the only part of Frank Dodd that I’ve seen to be a good thing. I’m sorry that the Fed chose to intervene and raise the fees.
However, I will say this...whether or not you use your card...you can pay with cash until the cows come home...the cost of the swipe fees are passed on to the consumer.
It’s not a direct fee for you, but you will pay the fee as part of the cost of doing business.
IOW, it’s passed on to you. At least, most of it is.
If you are paying an additional fee to the bank, that’s different than the 44 cents for each transaction that a business has to incur.
So...get worked up. ;o)
Big ole bump!
The last that I heard, the government in only interested in cash transactions of $10K, and more.
Not many folks deal in that kind of cash.
The banks only have to report transactsion over that. IIRC, the threshold for carrying cash is $1,000.00.
I don't pay any fees to any bank except for mortgage interest; and maybe they pay me less interest on money I have on deposit than they otherwise might. I guess the 44 cents is built into this. Maybe I use an ATM 20 times a year so that's $8.80. One round trip on the Throggs Neck Bridge to Long Island is $13. When they built the bridge they charged a quarter and the toll was supposed to go away when they bonds were paid off which they were many years ago. But they politicians loved collecting the money so much that instead of retiring the toll, they periodically double it. I just got a notice that my local politicians want more than $3600 A QUARTER from ME to live in MY house. Other local politicians take 6% of my money when I earn it and 6% more when I spend it. And don't get me started about the Feds.
Yeah. That's the thing. From now on I'll get p*ssed off about some business that charges me $8.80 a year by stealth for a service I want that they actually perform and learn to love my politicians.
ML/NJ
You are a nice person, but you have totally gone off topic.
This thread is not about cash, but about swipe fees. That has nothing to do with cash.
This is your post to me...
“But let’s say there were such a charge and that my average card purchase is $30. Here in NJ the government would demand an immediate payment of $1.80 to THEM. It’s hard for me to understand how people can get so worked up over the 44 cents and ignore the $1.80.”
I would say that your main gripe is to the state of NJ.
However, even if you never swipe a card, those fees will still be passed on to you.
We are talking about every single swipe in the entire country.
It’s not a STATE thing.
Seems it does if you're talking about ways to avoid them.
What don’t you get about the fees being exorbitant, and businesses passing those fees along to people who don’t swipe in the form of higher prices?
You try buying ATMs for $30-50,000 each, keep them stocked, maintained and insured, and replace them every 3-5 years, at 12 cents per transaction. Let me know how that works out for you financially.
My husband has ATMs. The fees that the banks charge to allow each and every swipe are far more expensive...they were 44 cents a swipe. Thankfully, they are a bit less now.
Do you own the ATMs that are placed in businesses?
BTW, how does a cap on swipe fees affect you? Did they lower the owner’s take?
These transactions clearing houses sit between the banks and the ATMs. They recieve the card information and transaction requests, then have to connect to the bank's systems to verify the card and the account balances. They also have to be prepared to "stand in" for the bank and approve transactions if their connections to the bank are down. The cost of establishing and maintaining those data newtorks and processing those transactions is charged to the bank, who then has to pass the costs back to the customer. They also have to charge enough to make up for losses due to fraudulent transactions, or "stand in" transactions that were approved, but the customer didn't acutally have sufficient funds.
A cap on swipe fees would probably make placing and mainting ATMs in low-volume locations impractical, and many of them will simply be removed because they simply don't generate enough revenue to justify the costs of the ATM and maintenance and the fixed charges of the clearinghouse for the connection point.
Customers may see the swipe fees reduced, but lose the option to swipe at all in many locations.
Thank you so much for your reply. I understand your plight a bit better now. Unfortunately, I don’t see a winning option for either side.
“Customers may see the swipe fees reduced...”
Frankly, 44 cents is an exorbitant amount to charge businesses that have ATMs. My husband’s company eats most of the charges.
Surely, there is a happy medium somewhere.
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