Why shopkeepers ask for 2% extra when paying with card
|Debit Card||0.25 % to 1% of Transaction value|
|Credit Card - VISA / MasterCard||1.5% to 2.5% of Transaction value|
|Credit Card - American Express||2.5% to 3.5% of Transaction value|
|Swipe Machine||400 - 1000 Rs / Month|
So why do they charge extra?
It's usually one of two reasons.
- Some Merchants don't associate a cost with collecting cash; which is incorrect. Cash needs to be kept secured and monitored at all times, it needs to be deposited to the Bank regularly and cash sales need more accounting effort. There’s also the issue of theft with cash.
- The cost is actually really high in some cases. This is especially true for merchants with small margins. Let’s Say you spent 1,000 Rs at a Store and the merchants cost price for those items was Rs 800. You pay by card on which he is charged 2%. This 2% is on the total sale. So he is paying 20 Rs (2% of 1000) on his margin of Rs 200. That's effectively 10%. It cost him 10% more to accept cards than if he got cash. That’s ridiculously high. Credit Card fees have become so high because there are so many intermediaries and the entire system depends on expensive hardware.
This is why we created GalaxyCard. GalaxyCard is the first, truly digital credit card. It completely eliminates the need for any PoS / Swiping machine and gets rid of the multiple payment processing intermediaries. Payments made through the GalaxyCard Network are direct and allow Merchants to cut down commissions by up to 50%. Sign up for GalaxyCard now and get an Instant Credit of Rs. 10,000