MSE News: EU agrees card charges shake-up, but will shoppers actually pay less?

kiranj

Biggles wrote: »

To be honest, I'm happy with the open market setting the rates. Retailers can choose whether to offer CCs and will stop if the rates are too high.

That's a naive comment I'm afraid. As a retailer, we can be charged as much as 2.5% by credit card companies. As we sell high value items (with a very low margin) it makes it impossible to absorb the cost. It can be as high as £60-£70!!
But we can't just stop taking credit cards as our customers expect any retailer to accept debit and credit cards. We would lose a LOT of business completely if we didn't accept credit cards.

As a retailer, I guarantee that our customers will benefit from this reduction in card fees. I realise not all businesses will do this.

Cashback deals etc is all very well... but you pay for them in the end.

Biggles

kiranj wrote: »

That's a naive comment I'm afraid. As a retailer, we can be charged as much as 2.5% by credit card companies. As we sell high value items (with a very low margin) it makes it impossible to absorb the cost. It can be as high as £60-£70!!
But we can't just stop taking credit cards as our customers expect any retailer to accept debit and credit cards. We would lose a LOT of business completely if we didn't accept credit cards.

My point exactly, you still choose to offer CCs despite the costs. I know it would benefit many retailers (though I'm not sure about customers) but I'm not too happy about having price limits imposed from above by an outside authority. Nothing to do with cashback (tho I do take advantage of that where offered).

grumbler

kiranj wrote: »

...But we can't just stop taking credit cards as our customers expect any retailer to accept debit and credit cards.

I, as a customer, don't expect anything. When buying online I always pay by a debit card if it's cheaper. Why can it not be the same on high street?

We would lose a LOT of business completely if we didn't accept credit cards.

Yes, you'll lose customers that don't have enough cash available. If you want to increase turnover as a result of banks offering unconditional credit to their customers, it's reasonable to pay extra for this or pass this charge on the customers paying by CCs.
How did retailers manage to sell "high value items" before 1968 when CCs didn't exist?

As a retailer, I guarantee that our customers will benefit from this reduction in card fees. I realise not all businesses will do this.

Yes. We we already benefit from cheaper roaming calls from EU to UK than from UK to UK. Go on, Brussels! Has anybody ever calculated how much these (anti-)market regulators cost us?

I understand regulating very few basic costs of the most essential goods and services. Credit card is a luxury, not a necessity! If the regulators believe that market doesn't work, they have to break the monopoly, not to regulate the prices.

jonesMUFCforever

Vote UKIP then the only party to guarantee an in/out referendum.

[Deleted User]

Banks don't operate in a free market environment, so I don't see anything wrong in them being regulated. They receive state subsidies either directly (bail outs) or indirectly (almost 0% interest rates that they don't pass on to customers). Central banks are the antithesis of free market. If anything the EU is too timid when it comes to curb the banking system greed.

grumbler

Are you saying that Visa/Mastercars/Amex/... are banks receiving subsidies?

MisterBaxter

grumbler wrote: »

Yes, you'll lose customers that don't have enough cash available.

That's a broad assumption. I like many people almost always use a credit card for large purchases but never buy anything that I can't afford to pay off immediately. I like the added comfort that a CC can bring in terms of protection, I have had to use the protection on a couple of occasions when a company has ceased trading and not fulfilled their obligations.

If retailers charged different rates for cash purchases than they do for card purchases then it would up to the customer to decide where to shop and how to pay.

I don't know the retail industry but how does the cost of banking cash compare with card charges and how do retailers account for this.

grumbler

MisterBaxter wrote: »

I like many people almost always use a credit card for large purchases but never buy anything that I can't afford to pay off immediately. I like the added comfort that a CC can bring in terms of protection, I have had to use the protection on a couple of occasions when a company has ceased trading and not fulfilled their obligations.

Absolutely.
First banks have to boost a retailer's sales by offering unconditional credit.
Then, because of some stupid senseless law, they can be held responsible if this retailer pulls a fast one.

And why does all this "added comfort" have to be virtually free or need regulation?!

If retailers charged different rates for cash purchases than they do for card purchases then it would up to the customer to decide where to shop and how to pay.

I don't know the retail industry but how does the cost of banking cash compare with card charges and how do retailers account for this.

When I said 'cash' I meant the cash in a current account, not banknotes.
My post (reply) was about CC charges.

zerog

MisterBaxter wrote: »

That's a broad assumption. I like many people almost always use a credit card for large purchases but never buy anything that I can't afford to pay off immediately.

Right, so they won't lose your custom as you would pay by debit card, but they will still lose the custom of the people who are borrowing on the credit card.

phillw

Ectophile wrote: »

Yes, isn't it terrible that the EU wants to stop the banks fleecing retailers with excessive fees. Banks should be over-charging shops as much as they like. After all, it's not as if the customers end up paying the extra costs in higher prices.

Except they don't, because they have to be competitive enough to attract customers. Any slight increase can be more than made up for with cash back credit cards, which if you are not lazy then you will have signed up for.

The motivation for this is to make it more attractive for shops to accept cards instead of cash. Handling cash is very expensive, supermarkets hate the stuff so much they let you buy it with your debit card as "cashback". Any shop that loves handling cash is fiddling their tax, they surely aren't paying it all in at their business bank account as they have to pay for counter services.

When decimalisation came in the shops all revalued their products at a higher rate than the banks that converted your currency. They will use every trick they can to screw you out of your money. We just lost our only defence.

Next you'll suggest that personal bank accounts should pay the same as business bank accounts because it will reduce their charges and mean lower prices for consumers (except it won't).