what does it cost them to process credit/debit card payments?

spaceboy

The Office of Fair Trading (OFT) estimates this at about 2.5% on credit cards and about 50p on debit cards.

http://www.bbc.co.uk/news/business-22128692


But how exactly does it cost even 50p? It's all done electronically! I would have thought it would be lucky to be over 10p a transaction when you consider how many transactions there are a day.

zorber

More to the point if it cost a fixed fee on debit transaction, why is it 2.5 % on credit card transaction.

But i will answer my own question may be because the credit card companies are lending money rather than a direct debit of taking money direct from your account

mjm3346

The travel company for example are charged by the bank/cc issuer about 50p for a debit card transaction and a percentage on credit card transactions.

The travel company etc is not supposed to make a profit on the charge, the banks can as that is part of the money making process for them.

[Deleted User]

The cost of providing support, maintaining infrastructure, chargebacks, the transaction cost isn't to offset the cost of the transction; it's a cost charged with a transaction. Visa and Mastercard aren't connected to your bank, they have to make money.

meer53

Do you think all the staff at card processing centres work for free ? Or that they don't have to pay rent and other bills ? They may be processed electronically but without a processing centre or staff, how would they do it ?

spaceboy

meer53 wrote: »

Do you think all the staff at card processing centres work for free ? Or that they don't have to pay rent and other bills ? They may be processed electronically but without a processing centre or staff, how would they do it ?

Yeah but with the sheer number of transactions I'd be really really surprised if it has to be 50p per transaction. Sounds like a scam to me. Then of course you have a problem and have to call their help number which costs a fortune as they put you on hold and keep passing you around....

Hominu

It doesn't cost 50p per transaction, its a sliding scale depending on the amount of transactions you process and how much of the work you do yourself.

So someone like Tesco or ASDA will probably be charged 10p or less, whilst the local newsagent which has to telephone the processing centre for authorisation each time is likely to be charged 50p.

The same happens for credit cards - big supermarkets will pay next to nothing compared to small stores simply because of the amount of transactions they'll pass through, and some even have there own processing centres for further lower cost.

gb12345

spaceboy wrote: »

Sounds like a scam to me.

What a surprise, another numpty who needs to buy a dictionary or go back to school to learn the meaning of simple words.

spaceboy

gb12345 wrote: »

What a surprise, another numpty who needs to buy a dictionary or go back to school to learn the meaning of simple words.

What I mean is they are basically all price fixing this fee of 50p a transaction. Maybe I used the wrong work. Doesn't make me a numpty.

spaceboy

Hominu wrote: »

It doesn't cost 50p per transaction, its a sliding scale depending on the amount of transactions you process and how much of the work you do yourself.

So someone like Tesco or ASDA will probably be charged 10p or less, whilst the local newsagent which has to telephone the processing centre for authorisation each time is likely to be charged 50p.

The same happens for credit cards - big supermarkets will pay next to nothing compared to small stores simply because of the amount of transactions they'll pass through, and some even have there own processing centres for further lower cost.

ok, that sounds more reasonable. Isnt really mentioned in the BBC article though.

meer53

spaceboy wrote: »

ok, that sounds more reasonable. Isnt really mentioned in the BBC article though.

Do you believe EVERYTHING you read in the press ?