So, how is Master Card making a buck?
They get an annual fee, a fixed transaction fee when funds are added, and of course the merchant fee when you use the card to pay for something.
card companies make much more profit per transaction than on interest or fees.
when they get a percentage everytime you swipe your card.. it adds up real quick.
With the iFreedom Plus Mastercard, holders load up their card with cash in advance, up to $6,000. Each purchase draws down on the account without accruing interest.Mastercard gets a $50 fee for each card, and they get the transaction fee that merchants pay them to process payments via card. Also, they get 95 cents for each "reload" of the card. Mastercard is basically just doing the same thing that any prepaid Visa card is doing.The concept follows the Islamic principle that finance should be backed by owned assets. It was approved by a panel of Muslim religious scholars, Mr. Kalair said.
"You're spending money you actually own," he said. "There's a certain degree of stress when you use a credit card. On this one there isn't."
Cardholders pay $50 for two years of use and each transfer of cash on to the card costs 95 cents.
And since the new product doesn't actually involve credit, applicants are approved without a credit check.
Read the article.
MC makes money because they have use of the dollars put on the account before they’re drawn down.
They may make a small amount on the annual fee...
you get charged 95 cents per transaction.