Comments on: McBlogging http://timothyblee.com/2010/06/16/mcblogging/ A Blog by Timothy B. Lee Wed, 08 Feb 2012 02:37:33 +0000 hourly 1 http://wordpress.org/?v=3.0.1 By: Timothy B Lee http://timothyblee.com/2010/06/16/mcblogging/comment-page-1/#comment-13757 Timothy B Lee Thu, 17 Jun 2010 14:20:30 +0000 http://timothyblee.com/?p=3212#comment-13757 <i>Merchants can’t charge one price to a card carrying customer and one to a cash carrying customer, so the cash carrying customer ends up paying the higher price.</i> They can offer a discount to customer who pay in cash. You sometimes see gas stations do this, for example. But yeah, to some extent higher interchange fees have the effect of transfering wealth from customers who pay in cash to customers who pay with credit cards. Merchants can’t charge one price to a card carrying customer and one to a cash carrying customer, so the cash carrying customer ends up paying the higher price.

They can offer a discount to customer who pay in cash. You sometimes see gas stations do this, for example.

But yeah, to some extent higher interchange fees have the effect of transfering wealth from customers who pay in cash to customers who pay with credit cards.

]]> By: Matthew S. http://timothyblee.com/2010/06/16/mcblogging/comment-page-1/#comment-13756 Matthew S. Thu, 17 Jun 2010 14:15:36 +0000 http://timothyblee.com/?p=3212#comment-13756 I don't want to register for Atlantic Monthly, but I have a question about your credit card interchange fee article. What about customers who pay in cash? Aren't they only hurt by this situation? Merchants can't charge one price to a card carrying customer and one to a cash carrying customer, so the cash carrying customer ends up paying the higher price. Card sales are the majority of sales for any business that accepts them, so maybe this is immaterial. However, I feel that this viewpoint punishes non-card carrying customers (or alternatively, customers with low credit scores who can't get good "perks"), and rewards banks. I don’t want to register for Atlantic Monthly, but I have a question about your credit card interchange fee article. What about customers who pay in cash? Aren’t they only hurt by this situation? Merchants can’t charge one price to a card carrying customer and one to a cash carrying customer, so the cash carrying customer ends up paying the higher price.

Card sales are the majority of sales for any business that accepts them, so maybe this is immaterial. However, I feel that this viewpoint punishes non-card carrying customers (or alternatively, customers with low credit scores who can’t get good “perks”), and rewards banks.

]]>