The comments on the site below are just mind boggling…. and the banks are short of money?
Mathieson says: August 16 2019 at 2:48 pm
“Great example of an invidious practice. Add to that the growing use of contactless cards whereby value is similarly extracted and redirected for even the most mundane of everyday transactions. Why should your small local corner shop lose 3.5% to 5% of its turnover (depending on the size of its business) when you buy a newspaper or a bottle of milk? In a simple example say the shop operates on a 20% gross margin. If the owner loses 5% to bank charges for a card transaction it might only be a 5p hit for a £1 purchase but it’s a 20% hit to his gross margin and therefore a substantial threat to his business. It doesn’t affect the purchaser, who is often unaware of the implications, but it sure affects the trader, so why the stampede to a cashless society?”
“Richard, yes I do since we have a card machine. Before we start it is worth pointing out the horror from the finance industry over the idea of the ‘Tobin Tax’ on financial transactions where the rate was, I think, suggested as something like 0.01 %. Anyway, on a debit card you will pay around 0.35%. When debit cards first came in it was a fixed fee of around 15 per transaction, so e.g. paying £20,000 for a new card with a debit card (as I did in 2005) was very economical for the garage. Anyway, the banks changed it to a percentage a few years ago. On a credit card it varies a lot depending on what type of card and whether it is a personal card or a ‘business’ card. For a personal card they typically charge 1.5% while on a corporate card it is usually 2-2.5%. Amex and Diners Club cost the most at more like 4-5%. UK charges are apparently quite low compared to North America where our Canadian partners say they get charged more like 5% across the board. Apparently the whole US payment system is actually very primitive despite their reliance on cards. Very poor security, for example, and lots of issues cross-state or inter-bank.
Anyway, the banks are very happy to put a tax ranging from 0.35% to 5% on every transaction we make, but of course all their own financial transactions in the markets should be totally exempt.“
This is the thread I am referring to:-