92% of US Credit Card Volume Are Rewards Cards…
and Merchants Are Paying For It!
[Wall Street Journal Abstract] If you are tired of the unpredictability of credit card fees, then you are not alone. Major retailers such as Amazon and Target are seeking ways to reject the acceptance of rewards cards. A majority of that uncertainty lies within the structure of how credit card fees are structured.
When a merchant accepts payment for goods or services via a credit card, the merchant must give up a percentage of the gross sale to their credit card processor. This percentage gets larger if rewards, cash back, or “points earned” are involved in the transaction. The Wall Street Journal reported that 92% of US credit card volume is driven by rewards cards that earn card holders everything from trips to Tahiti or concert tickets. An extremely enticing perk as consumer. A losing proposition for Merchants. Small businesses and big businesses are stuck paying for these perks while card holders and the card brands cash-in.
What a lot of merchants do not realize is that although the percentages associated with an a-la-carte transaction seem small (4.5% transaction fee on $50 is only $2.25) those fees quickly start to add-up over the course of a month. Rate Lock Zero is designed to help alleviate the financial burden Merchants feel when accepting credit cards. By offering cardholders the ability to pay for their own transaction via Auric’s software/hardware package, Merchants can now eliminate nearly all of their credit processing fees.
To learn more, contact one of our Account Advisors today at info@thinkauric.com or 855-679-7300.
https://www.wsj.com/articles/shoppers-love-rewards-credit-cards-retailers-hate-them-1537867801
