Nov 22, 2007

Credit Card Transaction fees

I've seen some mention of this topic on many online forums in the fast few days - for the uninitiated, this is about the 2% or 2.5% "extra" that merchants charge for using a credit card at their shops. This is because banks charge them this amount, and they are unwilling to pay it.

Most card users express their outrage at having to pay more. I have a simple story to tell.

Merchant: "That would be Rs. 2500, plus 2% if you want to use a card."
Me: "But isn't that 2% supposed to come from your pocket? You shouldn't fleece your own customers!"
Merchant: "OK, in that case I will charge you the MRP on the sticker... that will be Rs.4000, and I will pay the 2% on my own."

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