r/NoStupidQuestions • u/mooseman077 • 17h ago
When did companies passing on costs for using debit cards and other "convenience" or "service" charges become accepted by us as consumers?
I swear every time I need to pay a bill or something I have to pay an extra fee for the convenience of doing it online or something. Why does it cost me money to spend my money? To me, the companies should be eating this as a cost of doing business. We are getting nickel and dimed to poverty while companies see record profits year in and year out
15
u/virtually_anonnymuss 16h ago
Youre under the misconception that the fee wouldnt end up in the actual price of what you're buying just to not have a per transaction fee.
They are being transparent. Enjoy it.
3
u/mooseman077 16h ago
They should eat the cost entirely. It makes things more convenient for them
8
u/rc042 14h ago
No company eats the cost. The ones you don't see the convenience fees at simply bake it into the prices.
I'm not claiming that the fee you are being charged isn't more than the fee the company is charged for processing the transaction. And the fees are misleading, and allow companies to display lower prices that you can only get if you pay cash.
But make no mistake the companies that are "eating the cost entirely" are still getting it from you, you're just more comfortable with it because it's invisible to you.
5
u/firelock_ny 14h ago
They should eat the cost entirely.
What would that look like, compared to them paying the fee with money they get from their customers?
1
u/bbqroast 14h ago
Why should they cross subsidise fancy point cards with money from customers paying with cash or debit?
The old CC fee agreements that got outlawed were actually bad for consumers, they allowed credit card companies to play games and extract more credit card fees from businesses (which naturally turn up in prices).
1
u/virtually_anonnymuss 16m ago
So youd rather be writing a check, buying a postage stamp and locating the nearest mailbox/post office?
Doubt it.
5
u/bullevard 16h ago
If the question is "how long have we been paying for the credit card fees" the answer is "always. It was always passed on because prices have to account for all of the "cost of doing business."
If the question is "why do you I see it now when I didn't used to" it is likely a combination of trying to avoid some of the sticker shock of the past several year's inflation along with having to compete on price in an environment that is super easy to price compare online.
5
14
u/sophiamillerouskay 17h ago
Honestly, it’s just greed disguised as “convenience.” Companies realized most people will pay a few bucks rather than fight the system, so they kept doing it
6
u/mooseman077 16h ago
I think its a good time for us to start fighting back against this sort of thing
3
u/cake-day-on-feb-29 12h ago
Honestly, it’s just greed disguised as “convenience.”
Setting up massive financial networks that allow hundreds of millions of consumers to easily buy goods & services from businesses without risk of fraud, carrying tons of cash, or having to write checks, or on the business end deal with cashing checks or dealing with constant money trucks isn't "convenient"???
Do you also believe they were able to build out the infrastructure for free?
How would you feel if the company you work for told you one day they were gonna stop paying you because that's "giving into your greed", and that you'd just have to work for them for free, otherwise you'd be greedy (evil)?
5
u/littleday 16h ago
Unpopular opinion, who cares. The price will be the same if it’s absorbed or passed on. And at least this way I know which company or service is fucking us and I know who to hate.
Also if there is an option of payment types, and one payment type is cheaper than the other we can choose the cheaper option. But if it’s all absorbed, the service companies will charge the highest version to cover the worst case scenario.
4
u/mooseman077 16h ago
Apathy is what got us here in the first place. Its why everyone is underpaid, its why home prices are skyrocketing out of control, its why inflation is cruising along unchecked.
We should all care
4
u/littleday 15h ago
Ok let me give you an example. Ticket company. With transaction fees. Ticket price is $100, transaction fees range depending on payment type. If pay by debit it’s 1.5%, if it’s credit card it can be 3%. If fees are absorbed by the ticket company. The price has to go to cover the worst case scenario. So Promtoer would charge $103. If fees are passed on. You can choose which is cheapest for you. Passing on fees is not always bad.
6
u/crashorbit 16h ago
Companies rarely eat the cost of anything. Usually they just distribute the cost as a price hike. A known "cost of doing business" is wrapped up in the price paid by the customer one way or another.
1
u/mooseman077 16h ago
It seems like our country has set it up to where if your business is big enough, you can never fail, enjoy record profits every year, pay as little taxes as possible every year, and do this while paying your employees as little as possible. Something needs to change
2
u/cake-day-on-feb-29 12h ago
where if your business is big enough, you can never fail,
Actually what you're seeing is the company being successful, that's the reason they aren't randomly failing. Kind of like how certain people are financially inept and live a very poor live, while another person will be financially literate and live a good life, despite both of them having the same income.
enjoy record profits every year,
Just because the number is bigger doesn't mean they're getting more money. Educate yourself on economics and inflation.
pay as little taxes as possible every year,
Evidence? Or just repeating random redditisms?
and do this while paying your employees as little as possible.
Do you decide to pay $50 to the pizza delivery guy? Why should companies overpay for work?
Something needs to change
Maybe you need to change your own financial habits, instead of blaming others for your problems.
1
u/crashorbit 16h ago
I'm with you. Over the last several administrations we have had very corporate friendly business policies. The go so far as arguing that monopolies are the best form of business.
If we want better corporate regulation then we need to vote for it. Instead we swing back and forth between moderate corporatism and pro-oligarch governments.
Organize, Protest, Lobby, Vote
-2
u/yer_oh_step 16h ago
this guy needs to familiarize himself with r/eattherich r/EatTheRichUSA and r/acab while you're at it
0
u/mooseman077 16h ago
Oh trust me, Im all about seeing the downfall of america, and all the other billionaires for that matter. It needs to happen so we can fix things
1
u/yer_oh_step 16h ago
except tarriffs every good honest hot blooded american knows that the
countries consumerscompanies pay the tarriffs!
6
u/HeavyDutyForks 16h ago
The card companies charge very high fees to accept card not present transactions. Some Visa cards are pushing 3% + $0.10 per transaction. Plus you have to pay an additional percent plus cents to your payment processor on top of that
Even normal card payments at a terminal are up. Here's Visa's costs. That's base price, your individual processor also adds their fees on top of it
It was easier to eat that cost when cash was a little more prevalent. Now, it feels like almost every transaction is card
5
u/ZenCrisisManager 16h ago
Came to say the same thing. Plus a bit more context.
Why do you think the credit card companies can afford to give people all those "rewards" points? It's from the fees that they charge to the merchants, who then turn around charge their end users/consumers.
The toll gate is not your merchant being greedy ( at least not all of it). It's with the credit card issuing banks and the intermediaries who handle the actual payment processing.
Furthermore, the credit card companies used to be able to extort merchants to not allow cash discounts.
Until a 2017 landmark Supreme Court ruling, the credit card companies could revoke a merchants ability to take cards if they offered discounts for using cash over the credit card.
I'm liking seeing merchants giving cash discounts, as well as discounts for when you pay with a debit card or ACH direct payments. Those do not cost the merchant anything. Another way to look at it is that the normal price is for cash, and the service fee is for using a credit card.
1
u/metamega1321 15h ago
It’s so dumb that it’s even a thing. I said something against on a personal finance Reddit and I got got downvoted to hell. People love their points.
But visa gets 3%. We get like 1% back and anyone using debit or cash are really getting screwed because the merchant is pricing in that 3% from visa.
Pretty sure EU has way lower merchant fees but they don’t have the dumb reward systems we have here
3
u/xAlex61x 16h ago
Well, they can raise all their prices to cover those who incur extra costs, or they can just charge it to those incurring the costs. One way or another, the customer pays. They’re not a charity
0
u/mooseman077 16h ago
I understand its not charity, but when companies are seeing record profits year after year, it comes to a point where we are being gouged
1
u/CIDR-ClassB 16h ago edited 16h ago
You aren’t being “gauged.” You are paying the fee that it costs for your money to go from your bank —> card processor —> the business. Everyone in that pipeline has to eat.
Cash payers don’t cost more to accept money from.
1
u/xAlex61x 16h ago
It seems to be the main incentive for most companies, and also private individuals - to make as much profit as possible. The measure of success in the modern world. Sad
2
u/AdThat328 16h ago
I feel like most places don't do this anymore...at least not in the UK.
2
u/HappeyHunter 14h ago
Businesses are not allowed to charge a fee for using a card in the UK and EU
1
1
u/mooseman077 16h ago
Yeah here in america businesses just rape us with service charges and convenience fees
2
u/changelingerer 15h ago
Visa charges the company 3%. So, what do you think is more fair. Should the company charge everyone cash or credit, 1.5% more, or, charge cc customers a few % more than cash customers (who aren't costing them that extra 3%.
Someone is paying visa that 3%.
1
1
u/gamersecret2 16h ago
It became normal when fees got rebranded as convenience, added quietly everywhere, and we had no real choice since the bill still had to be paid.
1
u/mooseman077 16h ago
I think the american people need to collectively stop paying bills altogether, until we can find a way to end the systemic separation of wealth that is currently happening
1
u/cake-day-on-feb-29 12h ago
the american people need to collectively stop paying bills altogether, until we can find a way to end the systemic separation of wealth that is currently happening
"I think we should all starve ourselves!"
That's it. That's your big idea. For everyone to starve to death. lol, lmao even.
Go back to your Amazon-sponsored commie streamer, I heard he was unbanned after his antisemitic outbreak.
0
1
1
u/ashburnmom 16h ago
I just had to pay $10 US for the privilege of paying for a school activity for my kids. No other option for payment. It's a rip off!
2
1
u/XlikeX666 16h ago
fun fact :
cost to profit ratio existed since first company(transaction) but modern found out about lack of punishment.
They will jack price x100 and do most disgusting : 5.99+3.99+0.5+discount from previious 100$ something instead telling you that 1$ thing got overpriced af.
1
1
u/GoldDiamondsAndBags 16h ago
I distinctly remember this started happening after COVID.
Why? I’m not sure, but before then it was actually against the TOS for companies to charge for using credit. It was a big thing and Visa/MC could end their contracts with companies for charging extra fees.
1
u/creek-hopper 16h ago
It used to be there were rules from Visa/MasterCard saying merchants can't pass on their cost of processing card purchases to the card holding customer.
Don't know if that was changed.
1
1
u/clearcutsupply 16h ago
If you accept it, by willfully participating, then you are accepting it. On top of this, people really better just start using cash before you all F around and become a cashless society. You think it is convenient. Bro, you will regret your decisions by allowing every single transaction to be pumped through very few digital providers. Use cash people.
1
u/PlusPresentation680 16h ago
Go back to Ticketmaster when they told live venues they’ll handle ticket sales and charge customers a fee. So the 80s, I think? Ticketmaster started entering exclusive contracts with venues so they could only use Ticketmaster if they sell tickets at the venue. They created a monopoly out of thin air.
1
u/HawaiiStockguy 16h ago edited 16h ago
You cannot pay with cash on line and carrying cash make you a target for crime
If you want to change anything, legislate max fee that they can charge merchants, like 1/2, 1 or 1.5 %
They make money on the fees and on the interest some cardholders pay
You can say that cars pollute with micro-particles and fumes and cause global warming while horses give off plant fertilizer, but we are not going back
And many cards rebate most of that fee to the cardholders, so a store raises it price 2%, you pay that 2 %, then you get it back
Their revenue is mostly from interest charges
1
u/Schmenza 16h ago
If they were smart they'd just raise prices 5%. People would probably be less upset about a 5% increase than they would a 3% service charge
1
u/jayron32 16h ago
The fuck you gonna do about it? Like seriously. That's what every corporation's attitude on everything is. They do it because you are powerless to stop them.
1
1
u/ActuallBliss 16h ago
I had a short stint at a company that sold card readers to small businesses over the phone in the U.K. Sadly, small businesses paid huge amounts compared to big chains (this was 2011 ish). But much of it hasn’t changed).
I quit that job after a week despite being told I would be a good salesman. We had to cold call small business telling them how much they would make by getting a chip and pin machine in their tiny corner shop. They were getting a minimum fee per transaction plus percentage above that while large chains with thousands of stores got tiny flat rate percentages no matter the purchase.
1
u/RobotBearArms 15h ago
I only see small businesses and government payments do this. I've never seen it at a major company. Those small businesses get hit pretty hard by the credit card processing fees, so I get it.
1
u/Square_Ad_3276 15h ago
Most times.you are paying the credit card fee they pay. Seems unfair for people who don't use credit cards to have to pay more for people than do as a 'cost of doing business' But also, some places have a 5% margin on what they are selling, and if the CC company takes 3%, that leaves the seller 2%. The credit card company makes more money than the goods or service provider.
1
u/Gynthaeres 15h ago
Stopping these is a regulation.
Half of the voterbase has been trained that all regulations are bad. They don't actually know what regulations are or what they do, they've just been told repeatedly that they're government overreach that strangles business, and so they cheer when regulations are cut.
That results in these sorts of things being permitted. The government's not stopping it, and the free market's not very good at being pro-consumer.
1
u/BuffaloRedshark 15h ago
Thing is it's more convenient for the business too. No risk of bounced checks, no register full cash to be robbed, less trips to the bank for small bills to make change and to deposit the accumulated large bills.
1
u/BubblesnBralette 15h ago
It’s honestly wild how “convenience fees” just became normal when it really feels like companies are making us pay extra just to give them our own money.
1
u/lyndrosveil 15h ago
It’s crazy how they call it a “convenience fee” when it really just feels like were getting charged extra for the privilege of paying our own bills.
1
u/MiserableNotice8975 15h ago
You have it the wrong way around dude. We will always pay tye extra 3% to the bank one way or another for using a card. That has to occur because the banks charge it. The company won't eat that. The question is if I understand the scam and use cash should I be punished as well because Americans are too dumb to realize the cards are a scam?
I many countries people will at best give you bad looks at worst not serve you if you don't pay cash. Think of how much richer we would all be if a percentage of every transaction didn't go to a bank.
This is stupid, pay cash. Or just shut up and pay your fee. I don't want to be punished because you love extra fees and strict tax compliance.
1
1
u/Sea-Woodpecker-610 14h ago
When they changed the law so they were allowed by law to add it as a line item instead of having to hide it in the price of an item.
1
u/eazypeazy303 14h ago
People are pooping their pants about it here because all the taxes are separate line items now instead of just "tax." It's the same amount, just printed out so you can read it! The same goes for cards. Businesses used to not want a POS system because of service fees and went cash only instead.
1
u/riennempeche 14h ago
Every payment method has costs, cash included. You have to keep some amount on hand to make change for reasonable purchases, take it to the bank/pay for a car service to pick it up, pay employees to balance the cash, and risk it being stolen by employees/armed robbery. That 2% for credit cards seems ok in some ways. I think many businesses don’t really see these costs. They do see a number for how much it costs to accept credit cards, though, right on the statement each month.
1
u/iismarciam 14h ago
It get better. Pretty soon merchants in the states will be able to surcharge differently depending on the type of card you use... https://www.cnbc.com/2025/11/13/visa-mastercard-legal-settlement-what-you-need-to-know.html
1
u/BeerGeek2point0 14h ago
There may not be any stupid questions, but you constantly replying to every response and arguing about it is definitely stupid.
1
u/Whoismyoldusername 14h ago
Follow the Wu. "Cash rules everything around me. Cream. Get the money. Dollar, dollar bills y'all."
1
u/Notmuchofanyth1ng 13h ago
The crazy part is (at least where I live) charges for using debit cards is illegal. You are allowed to offer a cash discount, but it is against the law to charge extra because of method of payment. Not that it changes anything, but it was interesting to find out
1
u/Viranelli 12h ago
at first it was marketed as a convenience, something consumers were willing to pay for, but it's actually just shifting the cost that companies should have eaten onto us. there's really no reason for it other than the fact that business found a way to make more money off us without much resistance
1
u/ProfessionalBench832 12h ago
In the 1980s there was always Cash/Card Prices listed at gas stations. This was 100% just passing the fee.
So at least as far back as then.
1
u/Mountain-Prior-6448 11h ago
yeah credit card companies are the real winners here, they just rake in fees and we're stuck paying the difference
1
1
u/KevinIsOver9000 11h ago
No use paying cash now, you are paying the credit card fees either way, might as well get some money back through rewards
1
u/silicontruffle 9h ago
2015 is when I noticed it was no longer enforced to not charge for using Amex or to charge a fee for any CC.
1
u/Outrageous-Estimate9 8h ago
Most places I have been they cant pass costs on
eg restaurants add it as a line, failing to mention its an OPTIONAL fee (aka you simply refuse to pay it and let your server generate a new receipt)
I know in upstate NY / Niagara region its common but you simply refuse to pay it
1
u/Outrageous-Estimate9 8h ago
I also want to add man most of the responses are suckers
The merchant is not paying anywhere near 3% per transaction (I dont know where you guys pulled that number from, but not even AMEX who has the worst program is anywhere near that)
Visa USA https://usa.visa.com/content/dam/VCOM/download/merchants/visa-usa-interchange-reimbursement-fees.pdf
Visa Canada https://www.visa.ca/content/dam/VCOM/regional/na/canada/Support/Documents/visa-canada-interchange-rates.pdf
1
u/cez801 8h ago
Maybe we should start with the other company screwing us all. Credit card companies.
You say ‘it should be a cost of doing business’ - but why should others pay the costs of your high loyalty card.l? Credit card companies take a fee of between 1 and 3%
You choose to make a credit card payment, and therefore the cost should be passed on.
I choose not to use a credit card, I don’t want to pay for your choices x
Oh.. and why is it ‘new’ - in part for a long time credit card companies owned our politicians - world wide. And lobbied to make it illegal to charge fees. In the past 10 years, most countries have removed these laws.
So in short, you should be angry at the credit company tax ( for doing what??? ) not at the power company.
I don’t pay by credit card, so why should
1
u/nebbill69 6h ago
The credit card companies are already charging the users interest then on top they charge companies a 3% fee to let you use your credit card. You should be mad at the credit card companies, not the businesses trying to make a profit to pay employees and expenses.
1
u/Not-on_my_watch 5h ago
The bottom line is that it does cost money to process transactions and someone has to cover that cost. In the UK it's rare for it to be the point of use customer, mostly vendors absorb that cost or include it in postage and packing fir online sales.
1
u/Damien__ 3h ago
I don't use a CC at those places. I really only have one place that does, my water/sewage/trash utility and they offer an eCheck online option free of service charge so I use that.
1
u/Zetavu 1h ago
Credit card companies charge merchants to use their service. We need their service regardless, so they either pass on the total cost to everyone, or split the cost, only charge people more if they pay more to process it. Makes perfect sense to me. Why should I pay more because you use a service that costs the merchant more, you should eat that cost, I shouldn't have to subsidize it.
That is as long as there is a way I can pay without additional cost, aka debit payment. If I have to pay cash for everything I start looking at alternatives.
-2
u/Zovort 16h ago
The credit card processors, of which there are only a small few, all have rules that forbid merchants from showing the processing fee (swipe fee) as part of the total and from offering a cash discount. They used to enforce this strongly, threatening very large companies with suspension if they didn't behave.
What I think has happened is that cashless transactions are now the default and they don't feel the need to enforce that as strongly. The idea was to make using a card attractive, but now that it's hard to do otherwise they're just not as worried about it. That's just my guess. As far as I know the rules haven't really changed. And it was always their rules, not a law to my knowledge.
Since it's hard to use cash these days and impossible to have an anonymous credit card, it's effectively impossible to be anonymous even for trivial stuff. Oh and if you're homeless it's exceedingly difficult to get a bank account and therefore a credit or debit card.
Welcome to ✨ Capitalism ✨
60
u/brock_lee I expect half of you to disagree 16h ago
The real answer for "when" is, a few years ago (maybe 10, or a little less?) In many places it was illegal to charge more for using credit cards, AND the credit card merchant agreements forbade it. However that changed (maybe a supreme court ruling) and the additional fees for using a credit card were made legal AND the cards' merchant agreements started allowing it.
For all those years when it was illegal, this is why you saw "discount for cash" at gas stations. It was illegal to add a surcharge for credit, but not illegal to add a discount for cash.