Infographic Category Business

The Hidden Plastic Economy

By | source:MerchantNegotiators Apr 10th, 2015

Our countries day-to-day purchases run on plastic. Debit and credit cards make up 65% of all daily purchases, but credit cards are where things get confusing. Ever wonder why you local taco place won’t take cards? Processing fees. Companies like MasterCard and Visa, your bank, and the processing bank all take a piece of the pie away from the merchant when you use your card.

Most of the processing fee goes to your bank, but there’s plenty of other institution getting a cut as well. Other variables come into play as well. International sales and using a rewards card can increase the processing fee. These fees can really add up for small businesses who make a lot of low-priced sales. It also will take around two entire days for the merchant to actually receive payment.

Surprisingly card ownership in America has decreased in the last few years. The average number of cards per citizen is 1.96, down from 3.7 in 2009. I’m curious if the recession had anything to do with this stat. Many Americans were forced to re-evaluate their debt and consolidate their credit cards. I wouldn’t be surprised if the average card per person starts to rise again while our economy recovers.