Battle of the Cards: Why Merchants Accept Some Cards Over Others
If you are a credit card carrying consumer, you know it can be very frustrating to head out to a store to make a purchase, only to find your plans waylaid by the store’s nonacceptance of certain credit cards or exclusive loyalty to one you do not carry. In an ideal world, every merchant would accept every credit card brand. In reality, this is not the case, nor is it reasonable to expect the average consumer to have a stock pile of every credit card waiting in their wallet “just in case.”
While this can be a frustrating situation for the consumer, it is also important to put yourself in the merchants’ shoes and try to see things from their point of view. The truth is, most of them would probably like nothing more than to allow their customers to pay with whatever credit card they have on hand. Unfortunately, not all of them can.
Payment Processing
Visa and MasterCard only require one network to process payments. Discover requires a separate one, as does American Express. Merchants have a tough choice to make initially, because they have to choose the most cost effective method that they can afford. They need to choose the network that offers the best deal in both start-up and overall fees to suit their particular needs. Sometimes it is a matter of personal network preference, however, it’s usually more about what is best for the business overhead in the long run.
Merchants typically have to swallow the cost of initial account set-up and processing equipment. Then, they must pay maintenance fees and per transaction fees, which while typically minimal on a per transaction basis, really add up quickly. This can put a dent in the profit margin. On top of that, merchants often need their money sooner rather than later, so they need to choose a network that pays them at a rate that satisfies their preferences.
With these things in mind and the differences in rates per credit card company, a merchant really has no choice but to choose the network that is best for them, eve if it means alienating customers who carry cards they will not be able to accept. It may not be ideal, but that’s just the way it is.
They’re Thinking of You Too
One last thing to keep in mind when you become irritated that the store does not accept your card: appreciate it. While it may be inconvenient, the merchant is not thinking only of their bottom line. They have their customers in mind too. Accepting more cards with higher fees and expenses would drive up the cost of their products, affecting their sales and your pocketbook.
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