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How do 'register your credit card with us, and earn cashback' schemes work, or make money themselves? (kbin.social)

submitted 11 months ago by [email protected] to c/[email protected]

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For example, with T-mobile, I can register my credit card, and if I use that credit card at any of the participating outlets, I can earn cashback. Similarly, if I register a non-Bilt credit card with Bilt, then I can earn Bilt points on 'eligible spend'. How are they able to access my credit card transactions? and are they getting access to only the participating outlets, or all of my transactions? and what do they gain by doing these schemes other than increasing their brand value?

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[–] [email protected] 29 points 11 months ago (1 children)

Visa does not care about interest. The issues bank does.

Visa makes its money on transaction fees. Every time you use your card, the merchant is charged an additional fee, usually a percentage of the amount this of the sale.

In these agreements, T-Mobile is buying transaction info from visa. The level of detail varies, as you say, but it's just more ways for companies to track consumer habits and later sell you something.

[–] [email protected] 4 points 11 months ago

usually a percentage of the amount this of the sale.

It's usually a percentage plus a fixed amount. Rewards cards and AMEX and Discover can be significantly higher than your bog standard bank account card.

Here's Squares rates, which flatten out all the variables to these standard fees. Traditional merchant credit card processing services pass on the exact charges based on the type of card, issuer, and entry method. I think AMEX was 3.5%+.

The Square standard processing fee is 2.6% + 10¢ for contactless payments, swiped or inserted chip cards, and swiped magstripe cards. Payments that are manually keyed-in, processed using Card on File, or manually entered using Virtual Terminal have a 3.5% + 15¢ fee. Invoices cost from 2.9% + 30¢.