[Closed] credit cards - what's their fee to retailers ?

iirc 2 to 5% depending on several factors.

Crap answer, but it depends...on the retailer, volume and value of sales.

OK, ta Clubber (another edit: and rogg) - good enough

(just wondering how much my custom is worth to one particular provider)

Quick google says 2-5% and about £15/month rental on the kit.

Still probably better than paypal

Have a look at 'interchange fees' on Wikipedia. The fee is made up of a few different components, but does seem to add up to 2% - 5% as mike says.
Seems to be that the card issuer (bank, store etc) gets a cut, as does the brand (VISA, MasterCard), and the acquiring bank (the retailer's bank).

Depends on size & type of purchase. But generally yeah, varies between 3-5% overall cost to us.

And in our business, we're only operating on around a 5-8% margin (box shifting!) anyway, so regardless of payment method its exceptionally cut-throat out there right now, so generally we decline credit card purchases (as asking a customer for the 3-5% on top is not very professional).

I ask for the 3% on top for credit card purchases ! However i do have large balances and this percentage can be very expensive against margin. In my experience people understand.

Last time we took cc, it was about 2.5% and then there where just hand embossers, now you need to hire or buy the terminal, or mobile phone terminal, then there is rental of the line and probably other charges, then there are the charge backs when a customer is not happy.

^^ Talking of which, I have 3 terminals going spare (Ingenico TT41+customer pin pad+power supply etc) if anyone wants a cheap spare in good condition*

*Because if you break (spill coffee!) on your hired terminal, they will charge you some daft statutory fee to replace it (around £220 IIRC).

Look up interchange fees, look up 4 party model.(applies to Visa and Mastercard but not Amex, which is a 3 party model)

[url= http://www.visaeurope.com/en/about_us/our_business/fees_and_interchange.aspx ]Visa website[/url]

Interchange varies according to many factors. Without it, you wouldn't be able to pay by card because the system wouldn't exist as no-one would benefit from accepting cards instead of cash...

Visa/Mastercard do not issue cards or take any income from the transaction. They set the interchange rates but this is not an income stream for them, they make their revenues elsewhere. Their main asset is the networks through which the payments are sent.

Interchange is a revenue for the card issuer e.g Barclays
The retailer's bank pays the issuer
The retailer's bank recoups this cost when it charges a merchant service fee to the retailer for giving them the kit and support to accept card payments
So the retailer has to pay their bank... and this cost makes up part of the cost base of their business. If they didn't accept this cost they wouldn't be able to accept cards and likely they'd be less successful as a business

It also depends on the type of transaction (face to face are charged less than phone or internet), the type of business you're in - some have more honest customer profiles than others, and the amount of business taken by card per annum. Any business taking £1m per annum or more is unlikely to have charges of more than 1.5% overall in my experience - probably nearer 1%.

Colin

...and Amex often seems to be much more expensive to accept...

We were antique dealers and restorers turning over around £350k about 20 years ago and were going to be charged 4% plus around £75/mth (can't be sure, it was a long time ago) for the card machine which was the old fashioned metal job with slips that had to be signed, pre-dating chip and pin

Its a whilse since I've been involved in it, but certainly back in the day different cards charged different amounts, American Express being one of the most expensive.

Hence why AM-EX offer huge cashbacks, they charge upto 15% i believe.

Hence its useless as no one will accept it other than big US CO's