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Interchange fees explained [infographic]

Earlier this year I wrote a good deal about merchants who try and violate their credit card contracts by imposing minimum purchase amounts. Needless to say, I am not too fond of this un-American practice and even wrote VISA a pleading letter asking them to start enforcing their own rules.  As you probably expected, VISA has not responded.

But the question remains: why do stores hate accepting credit cards so much? The answer has to do with something called interchange fees. Thankfully, the good folks at the Government Accountability Office have released a handy chart to explain them.

Sure it seems like stores get a bad deal since they only get $97 for every $100 worth of goods they sell. But no one forces them to accept plastic. And that $97  is precisely $97 more than they would have made from me if they didn’t accept credit cards.

Besides, printing, minting and distributing physical money has considerable monetary (and environmental) costs too; it is just that those costs are borne by the taxpayers, so merchants don’t tend to whine too much about them.


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