They'll find a way to get that extra money back.
Price: $ 110
Discounted price for cash payments: $ 100
Everybody is saying how great this is to "stick it to the banks" but they arent connecting the dots: eliminating fees for paying with cards is actually an incentive to use cards more, which in turn increases revenue from credit card fees from businesses to banks and credit card processors.
At least from the small business standpoint this sucks. It costs those small businesses 2-3% plus a transaction fee just to accept a card. So on small purchases especially a business takes a hit to accept a card instead of cash. A small convenience fee for card use kept the cash price lower. Don't get me wrong, some places charged an unreasonable fee, but in my experience it was usually small.
I assume prices will just increase a bit overall now.
Well shit, can I claim that 50p charge back that I paid to use my card in the breakfast cafe this morning?
At least in Brazil (where different final prices for different payment methods always existed but were only legalized recently), if I have a store and want to accept cards, I have to buy or rent the card readers, and a third party has to administer the transaction. This third party has costs, employees, taxes to pay, etc. They will not provide their services for free.
So if it costs more for me, I'll surcharge the customer. If I can't, I'll have to share that extra cost with all customers, then cash paying customers would be paying extra for something they're not using.
Now, if banks themselves gave me the card readers for free - I suppose it's cheaper for them to support the readers than to have a human cashier at the bank to receive my cash deposits - then it would save me the trips to the bank, so paying with cards would be cheaper than cash.
But not really, to be replaced with a "service charge" for using their website.
>This is a European rule.
I didnt realise this was much of a problem, I try not to shop at places that charge for card
The UK cashless society is around the corner