On 10/3/2011 7:48 AM, SMS wrote:
On 10/3/2011 4:01 AM, Percival P. Cassidy wrote:
On 10/02/11 11:48 pm, Steve B wrote:

This is one of the things that's wrong with this country, and it now has
filtered down from the government to Joe Average who just keeps spending
when the money's gone. Hey, what do you mean I'm overdrawn, I still have
checks left. Just put it on my credit card..................

But with a *debit* card you *can't* keep spending when the money's gone.

Exactly. That's been the only rational argument for the use of debit
cards--it's good for people that are not able to properly handle credit.
The rest of that rant is equally bizarre.

Or not, his point was that it is expensive to a merchant (and therefore
all customers) because the CC fees on small purchases are
disproportionate and could kill the profit on the transaction.

But it is a great deal for the banks. Why do you think they run all of
those adds with folks dancing around waving their cards to buy a
doughnut or a coffee?



What BOA did is actually a good thing, though not for themselves. It's
time that the cost of transactions is out in the open. As for the
merchants, it's unclear how the debit card fee and the reduction in
merchant fees will play out. If it results in more people paying cash
then it's probably good for them. If it results in more people paying
with checks then it'll be as bad as the old debit card fees because the
check processing fees will be about as much as the old debit card fees.
If it results in more credit card transactions it will be worse than the
new debit card fees.

Congress did not look at the big picture here. If they want to do this
sort of banking regulation they should have addressed credit card fees,
check fees, and cash fees (yep!) at the same time.

They tried, CCs were part of the original language of the legislation.
Then someone delivered the appropriate thickness envelopes.


If the merchants really wanted to fight back against these fees then
they would all start to offer cash discounts. While some gas stations do
this already, not a lot of merchants do it, and the ones that do tend to
be smaller stores. This would be bad for the banking industry as well as
the government because there would be much more unreported income from
businesses. The reason many small businesses offer a 2-3% cash discount
is not simply to avoid transaction fees it's because they often will not
report the cash sales and not submit the sales tax to the state.

How would they do this when in most cases their contract says they can't
distinguish card transactions from cash transactions? Remember only a
few banks control *all* of the banking in the US.


Of course the large banks charge businesses for handling cash as well,
and there are costs of armored cars and the risk of handling a lot of

But that is not nearly as expensive as the tribute they must pay to
handle cards.

cash. A side benefit of accepting debit cards, for the merchant, is that
not only are they handling less cash from customers, they are getting
rid of cash by giving it to customers that want cash back so they are
paying the bank less for handling cash.