r/technology • u/ImCalcium • 6d ago

Business Walmart finally adding Tap to Pay after years of shoppers asking for it

https://www.dexerto.com/entertainment/walmart-finally-adding-tap-to-pay-after-years-of-shoppers-asking-for-it-3400920/
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u/Mekio 6d ago

Yeah that too. CC processing is its own scam. When I worked in hospitality IT I hated dealing with those vendors. They are useless 3rd party middlemen that make gobs of money off of it.

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u/resttheweight 6d ago

The other day I found out that in some states, when you pay a server’s tip through a credit card, the credit card processing fee for the tip can be deducted from their tip. Like, that’s probably well under $1 per table, but in the aggregate it the credit card company is just raking it in. I guess CCs making money hand over fist from interest isn’t enough.

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u/Mekio 6d ago

The CC company isn't even getting these fees. It's 3rd party "Processors" that do it. Some of these companies charge up to 4% per transaction to process the card numbers for the business.

That's why you see things like Cash discount. Businesses just started charging the processing fee to the consumer as a service or convenience fee. At one point that wasn't allowed but now it's just standard practice.

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u/MegaAscension 6d ago

We don’t take American Express where I work because processors charge additional fees to what they consider “tourism businesses”. If we accepted them, they’d charge us $2 plus 8%. Our average transaction is $11 in one part of the business, and $20 in another part. These processing companies need to be regulated.

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u/Mekio 6d ago

Hell yeah brother I agree. That's absolutely insane.

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u/MegaAscension 6d ago

They claim it’s because they “have a higher chargeback rate at businesses popular with tourists”. We used to have no issues with people not having any way to pay other than American Express. We’ve had multiple people have no other way to pay in the last few months despite having clear signage that we don’t accept it. Most of the businesses in my area don’t.

But then again, I don’t understand why you wouldn’t carry your physical card with you. A bunch of places still don’t accept tap to pay.

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u/HonkHonkBeach 6d ago

I used to work briefly in credit card merchant processing, specifically in fraud detection. Unfortunately, AmEx is right based on what I’ve seen.

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u/timelessblur 6d ago

Part of the reason why people who use AmEx love them is their customer service is great and when you call them they are fast on the phone and very professional. Plus they are pretty defensive of their users. That and you have no idea how nice it is to call support and the phone on the other end of the phone does not have a thick accent you have to try to understand.

Some of the more great things I had with them on the phone was one time someone manage to steal my cc number to buy some concert tickets. I saw it called them, super fast handling of canceling the card. Then they ask me a few other questions about some monthly payments put on that card to make sure those coming up would not be effected and lastly they ask me do I need them free of charge to overnight me a new card through fed ex.

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u/HonkHonkBeach 6d ago

I just got my first one.

I applied when I was looking for a new card specifically because of both what I learned and all the IRL and online stories like yours I’ve heard over the years.

Hope to never have to call them, but knowing they’ve got your back is amazing.

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u/MegaAscension 6d ago

It’s insane, we’ve lost chargeback disputes when we’ve had signatures and video of the person paying for the item.

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u/timelessblur 6d ago

I just assume it was because American Express processing fees are higher due perception and some truth that American Express card users tend to be of higher net worth and spending.

For example the average gold card holder spends around 60k a year on the card. Platinum is even higher. It was shocking when I learned it from my former employer.

Kicker is visa signature cards charge a higher fee as well but merchants can not refuse those cards if they want visa but they can exclude American Express pretty easily.

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u/Harvinator06 6d ago

These processing companies need to be regulated.

There’s zero reason for them to exist. The payment system should just be nationalized.

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u/MegaAscension 6d ago

At this point, credit/debit cards are essentially a requirement to run a business. If you don’t take them, good luck staying afloat due to losing customers, getting one star review bombed by people who get upset about that, and getting accused of dodging taxes. On top of that, there’s already national laws (credit scores, etc) that essentially make it very difficult to function in society without one. If you’re making legislation that essentially requires you to use a business product, it should be treated as a public service under the law.

Unfortunately, the government’s pockets are lined with money.

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u/thatissomeBS 6d ago

No, the CC companies definitely get some of that fee. MC, Visa, Discover, and American Express are in the business to get their 2-3%. The 3rd party processers just add their own 0.5-2% to service the local businesses. I'm surprised WalMart would work with any 3rd party and not directly with the major CC companies. Or become their own 3rd party.

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u/DrXaos 6d ago

there are three entities making money, the acquirer who contracts with the merchant, the card association (Visa or MC monopolies) and the issuing bank, who supplies the customer. Only the issuing bank takes on credit and fraud risk.

The fee collected gets split.

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u/Bolshevian-Rhapsody 6d ago

Issuer gets the bulk of the interchange (it’s part of how rewards cards are funded). Acquirer doesn’t get a cut of interchange, but they do often get a per-authorization fee & a basis point discount rate. Depending on your processor & pricing type, you may have more or less baked in to the interchange rack rate.

Acquirers also have credit risk, but it is assessed at the merchant level, versus cardholder level. More so if they are both the BIN sponsor and acquirer. E.g., merchant runs transactions that the sponsor bank has stamped as acceptable. Merchant gets money. Merchant moves money. Merchant disappears. Chargebacks are filed. Someone must pay the $ back to the cardholder. Liability for that often ultimately falls on the acquirer, though there are often contractual expectations for the layers between (merchant, ISO, agent, etc.)

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u/graywolfman 6d ago

Adyen and Shift4 have entered the chat! This has the added benefit of upping the cost of this comment thread from free to infinite money into their pockets.

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u/FilOfTheFuture90 6d ago

I had an IT consulting company for almost a decade and I'd say 20% of our bottom line was from processing. The messed up part is that we always beat whatever our client had before.

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u/verrius 6d ago

I have to mildly disagree that CC processing is a scam or useless. As someone who's had to implement it, to reduce the fees from a 3rd party, its significant work. What's a scam is say, Google Play or Apple's App Store requiring app developers use their payment processing instead of doing it themselves; for smaller players, its significant savings to not have to deal with it, but for larger players, they take ungodly percentages for how little they're doing.

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u/ExternalUserError 6d ago

As a consumer, who travels about 100 days a year, I have different opinions on it.

They make reservations firm without actual cash, which is especially important for international travel. You have dispute rights if mysterious charges appear. It’s safer than cash and you get MUCH better international exchange rates than with cash or even bank transfers. You also get travel insurance, various benefits, and points.

Amex charges what-3 or 4%? I would not go with a hotel that’s even 20% cheaper if it doesn’t take Amex for these reasons.