Retailers pushing back elite credit cards

Retailers pushing back elite credit cards

Business

Bloomberg published a finding on how the retailers are against the use of lucrative reward cards like Apple cards. Interchange fees have to be paid by the retailers and not by the customers. These fees are comparatively higher than normal payment methods. Elite cards charge higher transaction fees as it involves the cost of accepting credit cards to support their reward programs. The use of a traditional visa card will costs $1.27 to the retailer as swipe fees, whereas the visa signature will cost $1.75 to the retailer. Elite cardholder customers generally have more buying power, and additional spending can remove transactional charges.

For this reason, Mastercard can negotiate with retailers. Auric, payment processor said that transaction from premium visa cards was $50 higher than the regular visa cards since January 2018. Retailers can’t choose amongst cards, and they have to accept according to the customers, whether its elite cards or regular visa card. But for many retailers, Elite cards have become a point of contention. There has been an increase in the overall cost tied to electronic payments according to the report published by Neilson. Retailers are blaming elite cards for this increase in cost. These elite cards have become a burning problem for negotiation amongst banks and retail shops across the country.

In 2005, retailers sued the networks about high price rise in a swipe. Merchants and MasterCard are still negotiating over that litigation. Some of the merchants have settled the case while some of the retailers are still fighting for the higher prices. Apple cards are the most lucrative cards, but these cards are looked upon as elite cards by some merchants. Interchange fees have been a problem for retailers since long, not just by the launch of Apple cards this year. Bloomberg points out that more people have started using the Apple card as it is widely available now.

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