There's going to be a new New York state law going into effect that lets businesses pass on, to the customer, the fee for processing their credit/debit card. Before this, businesses had to pay a fee for processing a card. But, no more! The fee, for processing credit cards, will be transferred to customers. It will raise the price for consumers who use a card to pay for their purchase, but it will lower the operating costs of businesses, so they don't need to pay so much for the ability to take credit cards. I think this is a "fight back" to the movement to get rid of physical currency in favor of all-electronic payments. Because if electronic money takes over as the only game in town costs, fees for using it, will go up.
In my state, many businesses have a small additional charge if you want to pay with a card. Asian-owned businesses highly discourage paying with a card for smaller purchases. Maybe New York did not previously let businesses have an additional charge to the consumer for using a card?
Oh, that's an interesting trivia fact about the Asian-owned businesses wanting cash. That explains why there is a sign at my local Asian food place saying that they prefer cash. Also, I guess New York was behind the curve in passing costs on to customers.
No. The costs are going to get passed on to consumers. That is basic economics. (A person would have to be stupid to think otherwise) What this previous law in New York would have done is hidden that cost from consumers. Consumers still had to pay for it, they just didn't know where the money was going or why the price was that high. I imagine it would have also shifted the burden of additional credit card transaction expense onto those who were just paying with cash. Where if a business accepts both cash and card, those paying in cash are being made (by the state) to subsidize those who are paying by card. This is just basic economics.
Seems OP generates an interesting question- what happens to the price of processing a card if cash is no longer an option? I think we can assume VISA/MC/etc will jack it up once there's no alternative.
Actually, where I live (Eastern Long Island, New York) businesses had to absorb the loss as a cost of doing business in New York. This is a special case tourist trap where competition is heavy and customers are picky. Which keeps prices low. I was recently talking to my dad at the family business and we were exploring options on how to implement the new card surcharge in our existing point-of-sale system (POS). I think the most promising idea is a reverse coupon which adds to the total instead of taking it away. Did I mention that this card surcharge is a percentage of the sale's total instead of a flat rate?
What are you talking about? That makes no sense. If you add on a cost to all businesses of a certain type, you do realize that those businesses will usually have to raise their prices to cover those costs. What part of that are you not getting?
Businesses have to pay a transaction fee to accept credit cards What I'm telling you is that it couldn't be done here, not until this law goes into effect and allows New York businesses to add a surcharge to customers who pay with a card. Otherwise, why would it be a big deal?
What couldn't be done? Businesses must have been raising their prices anyway. How is adding a surcharge different from raising your prices to cover an additional expense? I previously just explained in this thread. I don't understand how you seem incapable of understanding. Of course, maybe your lack of understanding could go a long way towards explaining how New York could ever have passed such a stupid law in the first place.
