Credit Tips: Credit Card Transaction Fees

Posted On: February 4, 2005

Author: credithelp
Joined: 23 Aug 2004
Posts: 68
Posted: Fri Feb 04, 2005 10:23 pm
Post subject: transaction percentages

What is the typical transaction percentage that the issuers get each time we swipe the card? I’ve always heard around 1-2% and more for issuers like discover and amex but not sure if that is right or not.

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Author: Polonius
Credit Expert (100+ Posts)
Joined: 19 Jan 2004
Posts: 476
Posted: Sat Feb 05, 2005 2:35 am

Most processors charge 1%-4% plus a transaction fee of 20 cents to 50 cents. There are also monthly charges, statement charges, gateway charges, authorization charges if done manually or by phone rather than through a terminal. Rates can vary with average size of ticket per month, total volume of sales per month, and type of business. All is negotiable.

Polonius
“Neither a borrower, nor a lender be; For loan oft loses both itself and friend”

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Author: Ira
SENIOR MEMBER (Member for 2 yrs.+)
Joined: 19 May 2003
Posts: 827
Location: NJ
Posted: Sat Feb 05, 2005 5:10 am

A national or large regional retail store such as Home Depot or Target Stores will have a negotiated rate well below 1% on MasterCard & Visa.
Amex used to be the highest at around 5% but it’s been years since I checked into it and competitive pressures may have forced that rate down.

Do not let what you cannot do interfere with what you can do.

Ira

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Author: Board Monitor
Board Monitor/ Administrator
Joined: 05 May 2003
Posts: 545
Posted: Sat Feb 05, 2005 10:19 am

Here’s an interesting related article about Walgreen’s recent decision to stop accepting AmEx. After a month or so, they changed their mind! Apparently they were able to negotiate a more favorable discount rate.

http://cstorecentral.com/NACS/News/Daily_News_Archives/January2005/nd0125055.htm

Best Regards,
Curtis Arnold
Board Monitor
U.S. Citizens for Fair Credit Card Terms, Inc.
http://www.cardratings.com
501-663-0314 PH
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Author: credithelp
Joined: 23 Aug 2004
Posts: 68
Posted: Sat Feb 05, 2005 12:04 pm

Thanks for the article. What first got me thinking about it was the fact that issuers act like they dont make any money unless they get interest,annual fees,late payments etc.

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