Comment by stale2002
2 years ago
Ok, but about the percentage fee?
If Apple removed the transaction cost entirely, then there wouldn't be much complaint.
That absolutely raises prices and effects consumers.
If Apple takes a 0% fee, or allows other competitors some way of charging 0%, that would obviously benefit consumers.
The fee is paid by card issuers. It's 0.15% for cc and 0.5 pennies for debit cards. Card issuers take a large chunk of change in interchange fees, this is a tiny, tiny proportion of it. Even if they managed to pass the cost on (which they almost certainly cannot given the nature of that business), spread across it might be 0.00000x % increase in costs. And, it's quite likely to actually reduce costs for card issuers due to reduced fraud and reduced physical card issuance (those cards actually cost money to produce).
> t's 0.15% for cc and 0.5 pennies for debit cards.
So in other words, it's not 0%. Apple takes a cut.
Instead, it should be 0%.
That's how consumers would benefit. If it were 0%.
> The fee is paid by card issuers
This is a point addressed by any introductory economics class in high school.
It's called tax incidence.
https://en.m.wikipedia.org/wiki/Tax_incidence
And once you get into grad school they teach that those nice little graphs you drew in high school and undergrad were simplifications of the real world, and whether costs are passed on or not is very dependent on the specifics of the market. And then you hit the real world and realize, it's even more complex again when the costs are felt for some subset of transactions and not others, there are multiple parties to a transaction, etc etc.
Often, a high school education is not enough.
3 replies →
I question the governments decision to include this in the complaint. Surely Visa's 2-3% fee has a greater impact on the wider economy than Apple's 0.15%.
Visa's take isn't anything like that, it's close to 0.10%. The vast majority of that fat fee you refer to goes to the bank who issued the card.