Most of us recall seeing gasoline prices at your local station posted as $x.xx cash, $y.yy credit per gallon. That's because banks charge the business some percentage for every charge card transaction. Big customers like Walmart, maybe 1-2%. Your local auto repair shop, maybe 5%. I know firsthand that's been going on for well over 35 years as my small company was paying 5% (deduction from the total of all credit card slips 'deposited' that day at my bank). My ex-wife, a bank officer, had a position at her bank where she was their negotiator with larger customers when they set up accounts.
Then came the 'rewards' cards. In addition to the percentage taken by the bank as 'processing fees', NOW the bank offers 'cash back' using their cards, and vendors like an United Airlines or Amtrak give some percentage return when using their cards. Does anyone think for one minute the money/cost of 3% or whatever cash back/miles/points comes 'out of thin air'? Of course not! SOMEBODY has to pay that added 3%! It's a 'chess match' between consumers, businesses and credit card issuers...WHO will pay not only the actual rewards value, but the added labor/business expense required to administer the program?
Like the gas stations charging a higher price for credit and losing business as a result, the retailers are looking to get out from under the now 6% 'bank charge' for each credit card handled and are finally starting to scream. For what it's worth, I've started seeing a handful of 'cash/credit' prices popping up at gas stations again. Especially the independent gas station owners/franchisees who don't have the benefit of Walmart-sized banking power are getting squeezed hard. Something's gotta give!
So, will businesses simply increase prices a couple percentage points to offset the 'losses' associated with higher credit card handling fees? Will we start seeing separate prices for cash/debit vs credit appearing more and more often? I suspect both will happen.
By the way...has anyone noticed that charitable organization sponsored cards have disappeared? The 2-3% the credit card company was paying them for each transaction with that card got lost by the wayside due to the small numbers of card holders with cards such as Humane Society or National Wildlife Organization. Certainly the negotiations between retailers and banks have gotten much more complex in the past 10 years or so because of various 'rewards' on each card. Or, maybe the no-annual-fee credit cards will disappear and the annual-fee cards have fees increased and/or based on amount of charges...like the fuel surtax trucking companies have been charging for the past 20 years or so...
And as anyone who has sold stuff on Ebay for a good number of years will attest, the percentage 'hits' by ebay and Paypal have done nothing but go UP, UP, UP over the years. I am now forced to 'eat' ebays' 10% take, Paypals' 2-3% take, and pick up the tab for shipping!!! (shipping charges also get a 10% hit by ebay) Selling anything for less than $10 loses money, especially if I consider myself 'paid' at $10/hr!