Well of course, if you don’t plan to take advantage of any of the benefits of having your own merchant account, using square is better if it’s cheaper ;).
But, unless things have changed, square doesn’t integrate with a lot of different types of systems, you can’t use the same physical equipment, etc. It’s also much more likely for square to unilaterally hold funds for a long time without recourse, and don’t even get me started on PayPal. Many businesses can’t take on this risk.
But if it’s"worth the extra expenses" for the extra features, how does one also simultaneously argue that these extra expenses that were just justified are burdensome?
Well I guess you could argue that even the 2.75% baseline is “burdensome.” I’ve never made the argument that the fees are “unfair,” and never would. If I gave the impression that I think the interchange rate is “too high” that wasn’t my intention.
I’m (generally) a liberal and in favor of significant regulation in a variety of areas, but I cringe every time people want to regulate these types of charges to force these costs down.
Aside from my ideological opposition to that sort of regulation, the benefit to businesses to accept credit cards and utilize less cash is significant. Decreased insurance costs, less cash handling fees for banks (in case people aren’t aware, banks often charge businesses a percentage of cash deposited), less risk of theft (both external and internal), fewer opportunities for mistakes by cashiers and counters, faster transactions, increased consumer spending, and many others.
Visa, Mastercard, amex, etc provide a valuable service. As do the merchant processors. They should be able to profit.
The market when it comes to credit cards is perverted. There are 3 main players: merchants, card issuers/networks, and consumers. Card issuers compete for consumers by offering perks (cash back and/or others), while passing the costs to merchants, who for the most part don’t have any say. There is basically no competition on the card networks - merchants side. In this situation we would expect the consumer perks, and merchants’ costs, to be slowly going up – and in fact that’s exactly what we’re seeing. I remember when Discover with their tiered 0.25%/0.5%/1% cash back was the best. Then cards with flat 1% came about, then 1.25%, and so on. Now we’re up to 2-2.5%, with more for special categories. Free market is not going to solve this problem (if you consider this a problem; big losers are the people who use cash and non-rewards credit/debit cards), it basically created it.
That list looks pretty humorous to me. Basically, in the US, for this list, there would be a consumer protection agency addendum that would read something like: “If you use this card, don’t expect any cash back since all purchases are under some exception or another.”
I mean “nondurable goods” are excluded. Those are defined as products consumed immediately or with a shelf life of less than 3 years…
I think there’s enough competition in the US for no card issuer to want to waste their time with an offering anywhere near that bad.
Don’t worry, Alipay and the other payment startups will come for the current player’s lunch soon enough, particularly if, like you say, they keep hiking fees.