Why do grocery stores take credit cards on small amounts?

Question

Do they just think of it as the cost of loyalty? Do they have special agreements with VISA to get micropayments processed? Can they combine them in with your next purchase? I can walk into an Albertson's and buy an apple for 55 cents on my VISA. After traditional fees, they might as well of just given me the thing.

Answer 1

The answer above is correct. The retailer pays the credit card company anywhere from ½% to 6% depending on their deal with the card processor. (Most businesses LOATHE Amex who usually charges the retailer the highest fees.)



So, the grocery store, which paid probably 10¢ for the apple sold it to you for 55¢ and probably has to pay the credit people maybe 1 or 2 cents. Still not a bad mark-up.



Of course they'd go bust in a week if all they sold were one apple at a time to credit card users.



A lot of smaller or Mom & Pop retailers won't take a credit card for under a minimum amount because they're charged a minimum fee per transaction, like say 35¢. (I used a credit card at Kinko's last week for 9¢...I just never use cash anymore!)

Answer 2

There is not a per use transaction fee for the retailer. They pay a percent. The reason they take credit cards for even small purchases is, as long as you are paying, they don't care how you pay.