Dear Gaurav, every card transaction involved transaction charge applied by bank/card serving company on the receiver of amount (in your case it was honda show room). Now this is a tricky situation as economy of scale comes into play here. When you swipe your card for a large footfall location say retail store (Bigbazar, Reliance fresh, Star Bazar…..), Restaurants etc. you don’t pay this extra money. The reason is – the transaction charges are lower for such high footfall locations due to high volumes of transactions. Also handling a large amount cash from customers is not a favorable option for these stores so they also prefer card transactions.
So next time, when you are going to swipe, simply ask for extra charges & decide accordingly to swipe or not to swipe. 🙂
Thank you all for the answers. Sorry didnt has access to net for few days.
But I feel cheated to pay 2% extra on swiping of debit / credit card.
In this world of “Jahan bhi jayega direct jayega” seems a wrong message to me from service providers. The whole concept of ‘plastic money’ seems misleading.
Instead it should be “pay 2% extra on your card when shopping” as you save cost of visiting a branch and also the fuel is expensive so 2% should be okay with customers.
By giving card I think banks do not do any favour on us that is their business and they save lots of real estate cost and manpower cost. 2% extra on debit card swipe seems a crime to me.
For using the swiping machine of any bank, merchant will have to pay bank Merchant Discount Fee which is usually 2%. Some merhcants ask you to pay the 2% fee some pay it themselves.
Our article What happens when credit card is swiped? explains the process in detail.
@Gaurav, I believe you were charged/told that 2% extra amount will be applied over the purchase amount at Honda showroom. You are trying to ask us if it is justified. Am I right?
I have seen merchants, mainly whose volume of transactions are less/those selling computer accessories charge this extra amount. I bought my laptop with cash last year when the Lenovo dealer told me 2% extra if I bought with a debit/credit card. I was told that this extra fees helps them reduce the merchant fee burden! I’m not sure how this can help them as the total billed amount will go up by 2% and will be done in a single swipe transaction.
Now regarding the solution, I’m not sure if anything can be done. Why not check if same fees is levied by other Honda dealers in your city – at some large showroom? AFAIK banks won’t do anything as they may be aware of this!
I want to purchase a Honda activa with my credit card so please help to find out the dealer where credit card can be used.
Hi Pobi Baruah
Your cases is a bit complex and I think we are not the right people to comment on it.
My suggestion would be hire someone who is professional in this area and consult them
Manish
Dear Gaurav, every card transaction involved transaction charge applied by bank/card serving company on the receiver of amount (in your case it was honda show room). Now this is a tricky situation as economy of scale comes into play here. When you swipe your card for a large footfall location say retail store (Bigbazar, Reliance fresh, Star Bazar…..), Restaurants etc. you don’t pay this extra money. The reason is – the transaction charges are lower for such high footfall locations due to high volumes of transactions. Also handling a large amount cash from customers is not a favorable option for these stores so they also prefer card transactions.
So next time, when you are going to swipe, simply ask for extra charges & decide accordingly to swipe or not to swipe. 🙂
Thanks
Ashal
Thank you all for the answers. Sorry didnt has access to net for few days.
But I feel cheated to pay 2% extra on swiping of debit / credit card.
In this world of “Jahan bhi jayega direct jayega” seems a wrong message to me from service providers. The whole concept of ‘plastic money’ seems misleading.
Instead it should be “pay 2% extra on your card when shopping” as you save cost of visiting a branch and also the fuel is expensive so 2% should be okay with customers.
By giving card I think banks do not do any favour on us that is their business and they save lots of real estate cost and manpower cost. 2% extra on debit card swipe seems a crime to me.
Thanks,
Gaurav
For using the swiping machine of any bank, merchant will have to pay bank Merchant Discount Fee which is usually 2%. Some merhcants ask you to pay the 2% fee some pay it themselves.
Our article What happens when credit card is swiped? explains the process in detail.
I think it is fare that people paying by credit cards are asked to pay 2% more. This is like direct funds, before which everyone was paying the same..
@Gaurav, I believe you were charged/told that 2% extra amount will be applied over the purchase amount at Honda showroom. You are trying to ask us if it is justified. Am I right?
I have seen merchants, mainly whose volume of transactions are less/those selling computer accessories charge this extra amount. I bought my laptop with cash last year when the Lenovo dealer told me 2% extra if I bought with a debit/credit card. I was told that this extra fees helps them reduce the merchant fee burden! I’m not sure how this can help them as the total billed amount will go up by 2% and will be done in a single swipe transaction.
Now regarding the solution, I’m not sure if anything can be done. Why not check if same fees is levied by other Honda dealers in your city – at some large showroom? AFAIK banks won’t do anything as they may be aware of this!
Between this kind of extra fees seems to be picking up internationally as well: Stores Can Now Charge You Extra Just for Using a Credit Card (http://gizmodo.com/5979917/stores-can-now-charge-you-extra-for-using-a-credit-card)
Looks like an ad 🙂
Dear Gaurav, what’s the query?
Thanks
Ashal