credit cards

[tali1]

If i pay by cash in a shop they keep all money , if i pay by credit card they have to pay card company a certain % ?- so what benefit do shops get by allowing use of credit card ?- as they appear to be losing out compared to cash payment
Also why do AMEX charge more for their fees 4% rather than 2%?- they seem to be restricting coverage

[grasscarp]

A lot of people dont have cash to spend, they have credit cards. Therefore the shops can attract more custom by accepting cards. Simple as that. As to what the credit cards charge the trader it is up to them.

[helpfulhandy]

Some shops(airlines, etc) WILL ask for the customer to pay a surcharge of (say) 2.5% if buying by credit card to cover their costs.
The benefit shops get by accepting credit cards is that they do not miss lose out on a selling opportunity (esp for high value items as customers expect to pay by card and do not carry vast quantities of cash).
Better to accept a lower margin than no margin at all !
AMEX is a 'more exclusive' card - many retailers to not accept it due to the costs - coverage is restricted - this will be a margin versus volume decision.
Hope this is of some use

[kempie]

The British Retail Consortium (BRC) last year conducted a survey which indicated that cash is used for 32% of all money transactions in shops, stores and supermarkets.

The traditional advantage for retailers in accepting credit cards has been a reduction in the threat of being robbed and the convenience - more cash means more time needed for till reconciliation and increased banking. Retailers are charged a fee to bank cash but this is usually around a tenth of the fees incurred through credit card transactions.

Retailers able to set the prices of their stock can factor card transaction charges into the price - this would mean that cash purchases of this stock bring them more profit.

[SeaJayPea]

AMEX do charge retailers more, but isn't this is a charge card rather than a credit card? Basically, whatever you owe AMEX must be paid off each month, so they make no money charging you the exorbitant rates of interest that other companies do.
That certainly was the case when I had one, but I gave it back years ago.

[Mortartube]

I can't quite understand why shops en-masse worldwide don't tell credit card companies to shove it. Either we get your services free or we don't take your card. They would have credit card companies over a barrel. If no outlets took their card, they'd have no business. Shops are doing credit card companies a FAVOUR by accepting their cards and paying the card companies to do so. The customer pays ridiculous interest and there must be BIG money in cards or the world and his wife wouldn't put out so much junk mail trying to get you to accept one.

[Panic Button]

M&S fought it for years, and wouldn't take credit cards.

They had to give up eventually, to remain competitive.