I am also very familiar with fees for accepting credit cards. They are always fixed no matter what the size of the sale. Retailers pay a fixed monthly fee and a % of each sale. Sherpa is claiming that processing fees require the minimum payment, I question that.Discussion of this is at my facebook
@AlYourPalster @globesherpa I see your point, especially when Honored Citizen riders have to buy in bulk, $1 for 2 hours, $2 for day pass.
— Svën-Gørän Ølåfsøn™ (@pyratejack) September 3, 2013
6 comments:
Run the math.
GlobeSherpa gets paid a commission--some percent of each ticket sold.
For simplicity's sake, let's say they get 10%.
10% of $5 is $0.50.
10% of $2.5 is $0.25.
10% of $1 is $0.10
Any given credit card processor probably charges their client three fees: a monthy fee, a percent of each transaction, and a fixed amount per transaction. The last fee is important, because it means that as transactions become smaller, the percent of each transaction which goes to the credit card processor increases.
Let's say that they take $0.10 per transaction plus 2%.
2% of $5 + $0.10 = $0.20, so GlobeSherpa gets $0.30.
What if GlobeSherpa allowed $2.50 transactions?
2% of $2.50 + $0.10 = $0.15, so GlobeSherpa gets $0.10.
What about $1.00 transactions?
2% of $1 + $0.10 = $0.12, so GlobeSherpa gets -$0.02.
If GlobeSherpa allowed $1 transactions, they'd be paying for small transactions, and if they allowed < $5, they'd have diminishing returns.
Unless something has changed from when I accepted cc's there is only 2 fees, a per month fee and a % of each transaction. There is no other fee. They will pay the same no matter what.
I understand why they are doing what they are doing. But this is not supposed to be a 'for profit' sort of deal and $5 for a fixed income senior or disabled can present a problem.
How credit card transactions work
In case you don't, here's what's going on when you pay by card: When it's swiped, the retailer has to part with a percentage of your total, often in addition to a flat fee. These charges vary based on the retailer, the contracts they've negotiated, their business volume and even the version of a card that the consumer uses
Read more: http://www.creditcards.com/credit-card-news/credit-card-minimum-payment-purchases-law-1282.php#ixzz2drOhm6eK
Compare credit cards here - CreditCards.com
From your link: "per-transaction costs often range from 5 to 10 cents"
Also important to note, GlobeSherpa is a for-profit company, independent of the transit entity TriMet.
I understand sherpa is a for profit and nobody is forcing anyone to use the app anyway so its a matter of choice
Post a Comment