Payment processing - how many companies get a cut?

[ExtraSlow]

So it's well known that payment networks like Visa and Mastercard make some money off every transaction, but it occurred to me recently, there has to be more levels than that.

Here's a sample transaction.
- ES buys groceries at Superstore
- the device at the till is branded
- ES uses an RBC WestJet Mastercard through Google-pay tap with his phone.

Does WJ make a cut? Does Loblaws pay the POS device company? Does RBCake money on that? Does Google get a cut?

How many layers are there in this example? And what does all that total up to on a hundred bucks of groceries?

[dj_rice]

Yes, Loblaws gets charged a processing fee to the POS device company per transaction. Hence why if you go to some restaurants, they don't let you use American Express to pay because AE charges the most processing fees out of all the credit card companies.

Typical processing fee charges are 1-3% of the transaction amount.

[shakalaka]

So dealing with this at the moment as we are setting up bank machines at the firm. Moneris (machine company) gets a cut, bank gets a cut, credit card company gets a cut. Everyone fuckin gets a cut. I see why merchants add a 3% fee on credit card transactions. Though there is a cut for 'visa debit' transactions as well from what I am seeing.

[max_boost]

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Yes, Loblaws gets charged a processing fee to the POS device company per transaction. Hence why if you go to some restaurants, they don't let you use American Express to pay because AE charges the most processing fees out of all the credit card companies.

Typical processing fee charges are 1-3% of the transaction amount.

Amex a little higher but I support Amex as I am a heavy Amex user and transfer Amex points to aeroplan for sweet biz class seat redemptions. here’s some insider info from your fave member

Amex is like 3% of total transactions not many use it
Debit is 49%
24% visa
24% mc

[max_boost]

The machines itself like $50 per terminal
Base fee for the credit cards are .75%
+1% for basic card
+1.5% world elite
infinite privilege +2%
Platinum Amex +2.4%
Something like that

Or just get a square app, square flat rate is 2.65% for swiped cards and deposit is 1 biz day

[killramos]

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So dealing with this at the moment as we are setting up bank machines at the firm. Moneris (machine company) gets a cut, bank gets a cut, credit card company gets a cut. Everyone fuckin gets a cut. I see why merchants add a 3% fee on credit card transactions. Though there is a cut for 'visa debit' transactions as well from what I am seeing.

Do people pay their lawyers with a credit card?

lawl

[shakalaka]

Our retainers are 5k starting..if you could put that on a credit card and get some points why wouldn't you? And that runs out relatively quick depending on the issue so there's that. We do have to charge back the 3% however so majority of clients choose to do e-transfers/bank drafts etc. But we need a machine for debit cards too and there's a fee associated with that as well except it's much lower than using credit cards so we don't charge for that.

[killramos]

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if you could put that on a credit card and get some points why wouldn't you?

We do have to charge back the 3%

I love when questions answer themselves

[max_boost]

Debit transactions are 25c so you’re good there but my volume is 800+ debits a month lol

[shakalaka]

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I love when questions answer themselves

Some people don't care about the $150 fee on a 5K retainer...

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Debit transactions are 25c so you’re good there but my volume is 800+ debits a month lol

Time to start charging a percentage on those too...lol

But most terminals now have the stupid 'tip' option even for fucking takeouts that I am sure places way make more in tips which don't actually get given to the staff. I feel guilty hitting 'no tip' when the option prompts and it fucking sucks. lol

[max_boost]

Tipping on lawyer fees, do it haha

[tirebob]

Wow you guys all pay some high rates! Other than Amex, which I don't take, I pay I believe 1.5 to 2.2 percent depending on the card company and if it is a points car or normal card. Debit transactions are only 10 cents. Tap a bit more.

I have actually started doing a reverse role and rather than charging extra points for people paying by credit, I give a 1.5% discount on the entirety of the invoice on the spot if paying by debit or cash rather than credit card. People have been responding very well to it.

[shakalaka]

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Tipping on lawyer fees, do it haha

Haha. Has not happened yet. I have had clients purchase gift cards, other gifts of professional nature here and there but also rare. I guess they feel they've paid enough as is. lol

[max_boost]

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Wow you guys all pay some high rates! Other than Amex, which I don't take, I pay I believe 1.5 to 2.2 percent depending on the card company and if it is a points car or normal card. Debit transactions are only 10 cents. Tap a bit more.

I have actually started doing a reverse role and rather than charging extra points for people paying by credit, I give a 1.5% discount on the entirety of the invoice on the spot if paying by debit or cash rather than credit card. People have been responding very well to it.

dang bob who ya with
im with moneris, i might have to call in and have a firm talking with them or i will just send a letter signed govern yourself accordingly - shakalaka lol

[shakalaka]

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Wow you guys all pay some high rates! Other than Amex, which I don't take, I pay I believe 1.5 to 2.2 percent depending on the card company and if it is a points car or normal card. Debit transactions are only 10 cents. Tap a bit more.

I have actually started doing a reverse role and rather than charging extra points for people paying by credit, I give a 1.5% discount on the entirety of the invoice on the spot if paying by debit or cash rather than credit card. People have been responding very well to it.

Curious how that helps you/why you promote it? Don't you make the same in either scenario?

[tirebob]

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Curious how that helps you/why you promote it? Don't you make the same in either scenario?

That is exactly the point. If I don't have to pay it to the evil overlords I am willing to give it back to the client. It isn't to help me fiscally as much as it is to pass the savings back on to my customers making me look good, which in turn keeps them coming back. Cheaper than advertising. It is also shows people how much it costs a business to take cards. Surprising how many people don't realize the fees involved actually.

[ThePenIsMightier]

At the end of the day, I suspect a business brings in substantially more than enough money to cover these shitty fees than they would be able to if they only accepted cash/debit.
And these fees should be a deduction for the business, non?

But I totally get it. It's thieves leeching off of your efforts.

[shakalaka]

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That is exactly the point. If I don't have to pay it to the evil overlords I am willing to give it back to the client. It isn't to help me fiscally as much as it is to pass the savings back on to my customers making me look good, which in turn keeps them coming back. Cheaper than advertising. It is also shows people how much it costs a business to take cards. Surprising how many people don't realize the fees involved actually.

Makes sense and what I thought as well but wanted your input first.

[brucebanner]

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Curious how that helps you/why you promote it? Don't you make the same in either scenario?

Cash.. invoices disappear

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That is exactly the point. If I don't have to pay it to the evil overlords I am willing to give it back to the client. It isn't to help me fiscally as much as it is to pass the savings back on to my customers making me look good, which in turn keeps them coming back. Cheaper than advertising. It is also shows people how much it costs a business to take cards. Surprising how many people don't realize the fees involved actually.

aka government

[ExtraSlow]

So, further to the original question, does WestJet make money in these transactions, and does Rbc? What about Google? How is that split up?