Isn't 0.5% very competitive and basically nothing compared to taxes on the transaction?
Here in Poland we have a budding "save cash" movement. And they make some good points about freedom and privacy but are the loudest about the processing fees when mostly it's a way for smaller merchants to avoid paying taxes. Which is fine, I think they should be exempted anyway, but let's not pretend that it's the 0.5% in fees rather than the 30% in taxes.
The difference is that 0.5% on the whole payment, might in some cases be actually much more than taxes on the profit. Or even worse, if you sell for whatever reason without profit, the tansaction fee is your loss.
Standard VAT in Poland is 23% so taxes usually dwarf fees.
0.5% gross on a 1% margin business (which is most retail) is egregious.
I would like to know where that 1% retail business is located. My family has a bunch of hardware/electricity retail businesses and the margins are way more than that. Like 30%-500%.
Groceries and fuel come to mind.
People want every government service to run at a deficit and maximize the amount of pain inflicted to billionaires. They don't even need them to balance - they're just both good.
In Poland fees are capped at 0.3% for credit card, 0.2% for debit per EU. Which is why generally in the EU you don't have the insanity with credit card loyalty programs.
Only the interchange is capped. The merchant has to also cover network and processor fees. And then there are some uncapped transaction supposedly so the fee covers this risk. Comes out to 0.6-0.7% for a smaller merchant with the card present.
One person’s insanity is another person’s interesting puzzle and optimization problem.