[astura]

The EU caps interchange fees by law, the US doesn't (except on debit cards). As a result, credit card fees are much higher in the US because they can be. Credit card issuers kickback some of the fees collected from merchants in the form of rewards for using the credit card.

[Slartie]

This is also called the "poor people tax", because the merchants all bake these fees into their prices, which rise accordingly for all customers, including those who pay cash, or use debit cards or credit cards without those kickbacks. In order to evade the "tax", you are basically forced to pay with a credit card that has good kickbacks (>= 2% is acceptable if I remember correctly) so you recoup those 2% that are implicitly included in any price of any good in any store. Those who lose out are people with poor credit rating, because they either have no access to the best cards or have to pay ridiculous fees to get them.

In my eyes it's useless circulation of money in the best case (when recouping via kickback) and a tax on the financially illiterate or poor in the worst case. In any case it is creating a lot of expensive administrative overhead for no economic purpose whatsoever, and thus a healthy capitalistic society should want to get rid of it - which is even relatively easy to do in this case, as the European regulation demonstrates.

[jcrben]

Surcharging is becoming more common with a couple companies like CardX focusing on it: https://thepaypers.com/expert-opinion/credit-card-surchargin...

Particularly driven by https://en.m.wikipedia.org/wiki/Expressions_Hair_Design_v._S...

[Slartie]

This is an interesting development. I didn't know about that Supreme Court decision. So it effectively allows merchants to communicate a credit card surcharge as exactly that to customers, letting them know that it is caused by using a particular card?

Does that also allow merchants to put an additional surcharge depending on the card used onto a receipt? Or has that been deemed legal in an earlier ruling? Because I always thought the big card networks had some kind of legally binding contract with merchants which prohibits the addition of surcharges that only apply to their particular payment method - contract clauses that they could only muscle through because merchants effectively didn't have the possibility to just not accept Visa or MasterCard payments, while most of their competitors accepted them.

[mnm1]

Credit card issuers also kick back millions to politicians to keep this status quo. In most places in Europe, this would be called bribery and corruption. To us, it's just lobbying. But a rose by any other name ...