If a small business or retailer wants to have the ability to offer credit and debit cards as a form of payment to their customers, they must pay the corresponding bank a certain amount for each transaction. This transaction fee is set by the bank and is sometimes more than the retailer is willing to pay. If you’ve ever been a store that didn’t offer a specific credit or debit card, it’s because the transaction fees were too high for them.
There’s really not too much of a difference between using a debit or credit card at a retailer. Once you swipe your card, it will go through whatever baking system it’s associated with, such as Visa, Discover or AMEX. Both debit and credit cards use these banking systems to handle transactions and each of them have different transaction fees.
So how much is the average debit card transaction fee? A couple of years ago, banks were charging as much as 2% for each transaction. This may not seem like a lot, but that 2% adds up on each and every purchase. If a retailer were to generate $100,000 in debit cards, that’s $2,000 in fees alone. Some of the larger retailers may go well into multi-million dollar revenue, which would incur a significantly greater amount of fees.
Most of us aren’t store owners or retails so these transaction fees aren’t going to directly affect us. With that said, banks are now shifting their focus to start charging their customers to use their debit cards as well. Thankfully, this isn’t a transaction fee yet, but rather a monthly fee tacked on to the customers account. This is a fairly new occurrence that many banks are trying out for the first time.
Even if your bank doesn’t charge their customers for using their debit cards, you should still keep en eye out for any new information they send you in the mail. In the event they decide to start charging their customers, they should send you information about the bank debit card fee, so be sure to read any new mail they send out.
If you aren’t happy with any new debit card fees charged by your bank, be sure to voice your concerns to them. Banks are still testing out these fees to determine whether or not they’re a smart business move. While the fees are minimal, it’s still money that’s being taken out of the customers pocket.