Visa Punishes You for the Existence of Your Client

Inflowpay ^ | 13 Apr 26 | Inflowpay

[delta7]

Last month, two of your customers bought the exact same product at the exact same price. One paid from Paris. The other paid from Bangkok. You charged them identically. You delivered identically. But what landed in your account was not identical, and the difference had nothing to do with your margins, your pricing, or anything you control. It had to do with six digits printed on a piece of plastic in Thailand.

Those six digits are called a BIN, a Bank Identification Number. They identify the bank that issued your customer's card and, crucially, the country where that bank operates. When your customer in Bangkok tapped pay, Visa's network read those six digits, compared them to the country of your acquiring bank, and in a fraction of a second, classified the transaction as international. At that moment, a set of fees activated that had nothing to do with the size of the sale, the currency used, or whether the transaction was legitimate. They activated because your customer exists in the wrong country.

What Actually Happens When a Card Crosses a Border

The payment infrastructure that processes your sales was not designed to be neutral about geography. It was designed around a world where merchants sold domestically, to customers who shared a banking system with them. When that assumption breaks, which it does for virtually every business that sells online today, the system does not adapt. It charges.

Here is what stacks invisibly on every transaction where your acquiring bank and your customer's bank are in different countries. Visa applies a cross-border assessment fee ranging from 0.60% to 1.40% depending on whether a currency conversion is involved. On top of that, if the transaction currency differs from your customer's billing currency, a foreign exchange conversion fee of approximately 1.00% is applied. Then your PSP or acquiring bank adds its own FX markup, typically between 0.50% and 2.00%. None of these fees appear as a line item your customer sees. None of them appear clearly on your dashboard. They surface only during monthly reconciliation, buried in a net settlement figure that is smaller than you expected.

On a $100 sale to an international card, the minimum cross-border cost is $2.40, before a single cent of standard interchange or PSP processing fees. On a subscription product with a $30 ticket, that same structure takes a percentage that starts to look less like a fee and more like a silent partner who does nothing and takes a cut of everything....

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TOPICS:
KEYWORDS: ibtg; ibts; sextouristspaycash; visa

[delta7]

Interestingly enough, Silver price traded overnight in China is fetching more than $9 oz over the US Crimex spot price.....this whole corrupted US banking system needs to go away, permanently.....stay tuned.

https://metalcharts.org/shanghai

[Vermont Lt]

This is an example of where a digital dollar stable coin (NOT CBDC) would benefit the vendor. The fee paid for the transaction would be universal and significantly less…and the money would show up in the account almost immediately.

This is why the administration is pushing it. It would strengthen the position of the dollar as the reserve currency. And it would open more markets to use of the dollar.

[fruser1]

Would it be cheaper to have an employee or contractor personally deliver the product to the buyer and collect cash from them?

[A strike]

Bankers stealing ?
say it ain’t so ..

[TexasGator]

Too bad you backed up the truck and loaded up at $121!

[ByteMercenary]

This is not a new thing. There have been charges for currency conversion and cross-border fees for decades. Granted they were more appropriate when actual human handling of a transaction was involved - paying a couple of bucks for a guy to convert your purchase in the local currency to USD was reasonable. Now the computers do the work in a fraction of a second so I now think these fees are a bit over the top.

[dfwgator]

Now the computers do the work in a fraction of a second so I now think these fees are a bit over the top.

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They still had to pay for the computers.