This afternoon, a customer's order at our Orange County, Calif retail photo center totaled $398.19 and they presented their Visa® debit card. Twice it was not accepted. The transaction failed.
Why?
We understand that many ATM cards have a daily usage limit of $300. So, rather than creating a hassle, we immediately reswiped the card as a signature credit card. However, the customer was concerned - they knew there were adequate funds available and it was an embarrassing and uncomfortable situation. She even mentioned that retailers pay a higher fee for credit cards even though funds are immediately withdrawn from the cardholders bank account. [Little did she know we are the lead plaintiff in the merchant interchange antitrust litigation and co-edit WayTooHigh.com - The Credit Card Interchange Report].
Doing a little math proved her right. Rather than costing 30 Minute Photos Etc. a flat fee of 55-cents to process the PIN-based ATM card transaction as a debit card, our actual interchange payment cost was closer to $7.00.
Even if a customer has thousands of dollars in the bank, retailers are forced to pay higher signature-based interchange fees.
[WayTooHigh.com]
