2010 was a wild ride for the giants of the network of payment card issuers and banks. On the one hand, the Wall Street reform and Consumer Protection Act which came into force on July 21, has made significant improvements to the card acceptance policies for traders. Companies can now legally offer discounts to customers willing to pay in cash. In the past, business owners have argued that exchange rates of card reduces profit margins and therefore should have the right to encourage cash payments. This argument won the hearts of legislators and now is law.
On the other hand, the u.s. Department of Justice, antitrust lawsuits filed against giants of Visa card, MasterCard and American Express on October 4 for anticompetive practices. He broaches the same problem, the ability for marketers encourage discounts for cash. Visa and MasterCard resolved immediately, citing principally that the lawsuit sought to challenge the policies that had already been changed. However agree to expand the right of a merchant discounts, including encourage (and most shocking) your right to discourage the use of a rewards card by a consumer. Quote direct Visa's press release on the theme "as part of the agreement, the visa will allow U.S. merchants that offer discounts or other inducements to direct customers to a particular form of payment, including a brand specific network or to any product, such as a credit card Visa" non-reward. "
The ramifications of this resolution are the Earth tremble. A retailer cannot discriminate between banks, card issuers and everyone agrees that's fair. For example a company cannot choose to only accept bank cards of visa and America does not accept Visa cards of HSBC. The problem is that the customer John Doe has a rewards card that pays 1% Cash Back on all purchases. When he makes a $ 100 purchase, $ 1 is credited to him by the Bank that issued the card. Most consumers don't realize that cost is passed to the business, which essentially is then being charged an additional 1% in their exchange rates to pay for reward of John Smith.
Business owners made the case that they should have the right to offer a discount for cash or how it now becomes clear, the right to tell your customers not to use a rewards card.
Can I use my credit card rewards everywhere I go, and tend to fall into the category of consumers that obnoxious whip out just to buy a $ 1 cup of coffee. Until recently, any retailer impose a minimum credit card sales was completely in violation of the policy and subject to shutdown for card acceptance. Many retailers took the risk anyway. This policy was abolished in Wall Street law in July. Organizations now have the right to set a minimum. Having worked in the payments industry for several years, was a necessary step and long ago.
The average cost of individual transactions is 20 cents, which excludes the throughput. A $ 1 coffee cup would generate a loss of 23 cents on card fees alone, then make the sale debatable to the retailer. Consumer behavior is difficult to change card. I still try to use my card for coffee, for example, regardless of the impact.
Larger ticket items are determined to create an uproar of consumer. Here's the problem:
João Silva goes to best buy and pay $ 100 for DVDs on your regular Visa card. Next in line is me and I try to buy DVDs same with my rewards card 1% Cash Back. The box tells me that I can either:
R. pay $ 101 with my rewards card
B. use a non-rewards card and pay $ 100 as did John Silva
C. pay $ 98 in cash
It's great to have options, my rewards card is not reserved only for emergencies and I don't have much money in my wallet. Although it is only a difference of $ 1, I would like to pay the same amount as the previous client. After all that $ 1 "reimbursement" is not immediately credited to my bank account, it is stored as account points that accumulate over time and eventually I pay a reward. As far as I can tell previous customer was using the same piece plastic Rectangle as me. Why should my personal private contract rewards with my Bank now interferes with my ability to purchase products at the same price, other people?
Box argues that the retail price of DVDs are $ 101 and $ 1 off is essentially the discount for the use of a card not rewards. The consumer in me not seems to agree and the fictional Best Buy in this scenario would be a discrimination lawsuit in your hands.
As a veteran of card payments, think this criterion beneficial to the business, but as a consumer I think is intrusive and discriminatory. I would not like to boxes to watch for clues of reward program every time that use my card. If the signatures match, I would pay the same price as all other clients.
My Bank recently offered a limited-time only 3% Cash Back program. I can only imagine what would happen when you actually try to use it. "Hey, get out my store!" The new rewards card these days is the card that rewards you with a discount to not use a rewards card. Department of Justice thank him and Congress to make each day ' in front of the ' day.