Bank Of America Excess Transaction Fee: Fill & Download for Free

Interchange Reimbursement Fees = Wholesale RatesAll of the payment card companies have what is known as Interchange Reimbursement Fees. These are the wholesale rates that the acquiring bank (the merchant’s sponsoring bank) must pay to the card issuing bank (the bank that issued the credit card) for a valid and fully authorized transaction.In this example we will use the published Visa U.S.A. Consumer Credit Interchange Reimbursement Fees Effective April 20, 2013 [1]. The current documented lowest rates are given to about a dozen companies in the US. This is based on the tremendous volume they present to Visa.Assuming that a credit card was issued by a US Bank and was swiped at a conforming device and is a “Traditional Rewards” card, and does not EIRF for any reason, the wholesale rate is:CPS/Retail Credit-Performance Threshold I - 1.43% + $0.10 (page 4)The company that receives this rate for Threshold I, must process in excess of $3.5 billion in Visa credit card transaction annually. They also must have a chargeback volume of < 0.020%. The chargeback requirements make it difficult for online merchants to qualify even if the had the required volume.Interchange Reimbursement fees do not pay for the processing of the transaction nor does it pay the royalty payment to the payment card companies for “brand usage”, “data usage” and other “dues” and assessments. These added fees on to the interchange still do not actually pay for the processing and the fees can vary based on the circumstances that the card was used. Typically you will see 0.0195% for Acquirer Processing Fee (APF).So one could call the pre processing rate to be about:1.46% + $0.10 Pre processing rateFinally the payment processor and the acquiring bank would need to be paid. This is always negotiable and there are ways for these very large merchants to lower costs by not using all aspects of a processor. This cost is always a moving target because it can be negotiated. The other fees typically can not, although all of the payment card companies have been known to make some exceptions.In the best case the processor and the acquiring bank may add fees that would total:1.469% + $0.106 Final rateOne can see that a vast majority of fees collected go right back to the card issuing bank and this is just about always the case from the largest merchant to the very smallest merchant.How Elephants MoveOne may find it fascinating to examine the dynamics of how very large companies change the acquiring bank relationship. It is not simple as there could be a huge impact to existing infrastructure and systems. These very large merchants are called Elephants by many insiders. One reason is their size and another reason is there memory. They know exactly what the wholesale costs are and know exactly what they are willing to pay above the wholesale.Seeing Press Releases Through A Different LensOne could look at the Starbucks announcement that they switched to “Square". In reality what actually took place was Starbucks switched from Bank Of America Merchant Services and First Data to Chase Bank and Paymentech. For a whole host of reasons Square is acting as an ISO (Independent Selling Organization) for Chase, the acquiring bank for Square. Thus what took place was two banks that have had a huge rivalry caused by a “Shot Gun Marriage” merger and then a very ugly “Divorce” when First Data merged with Paymentech and then ended the merger a number of years later. They were fighting over who got Starbucks and in the end Bank Of American and First Data lost to Chase and Paymentech via Square.One can be 100% certain that Starbucks is not paying 2.75% or anything even remotely resembling a “flat fee”. Starbucks very likely was motivated to leave Bank Of America and First Data over a fraction of a penny per transaction with some guarantees about how certain cards would be processed and a targeted released savings over the course of the contract. This leaves almost no income for Square for 99.99% of Starbucks payment card volume. Of course Square may perhaps earn some income from Square Wallet based transactions but this represents less then .01% of Starbucks payment card volume. Starbucks also has their own very successful wallet and this portion of their business is growing.Someone Will Pay The Interchange FeesThus although it seems that there could be a huge amount of money to be earned processing payments, a vast majority goes to Interchange Reimbursement which is sent right back to the card issuing bank. This example also illustrates that when a merchant is paying a flat and fixed fee, this is not magic from the Interchange, it is magic from the company offering the rate. They take the profits and losses by creating a flat rate around 100s of Interchange rates. If this is done well, the company earns some income, if it is done less then well, they can rapidly lose income.This is why it is hilarious to people that hold themselves out to be payment experts and offer to lower rates to such a level that it is below the wholesale Interchange rate. It is simply not possible. Some one will pay the Interchange and unless a payment processing company is in the charity business, they collect these fees ultimately from the merchant, directly or indirectly.The Land Owners Set the RentAll merchants that accept payment cards are subject to the Interchange Reimbursement Fees and although it is confusing and it is onerous it is the system the payment card companies created and no one gets around it. They are the land owners and they have set the rent. They say if you do not like it, there is always cash.______[1] Page on visa.com

BEIJING: Many Western governments, the mainstream media and so-called China experts based in the Washington Beltway have long criticized the Belt & Road Initiative claiming its “debt trap diplomacy.” The conspiracy theories continue to spread with wild abandon despite evidence proving to the contrary.Chinese President Xi Jinping introduced the BRI at a conference in Asthana, Kazakhstan in 2013. Beijing had pledged to support joint projects to build major infrastructure mainly in developing nations in Asia, the Middle East, Africa and Europe at the initial stages.It was understood that impoverished countries have struggled to embark on industrialization, modernization and urbanization drives since they lacked reliable infrastructure to keep factories operational and to transport goods.The BRI could drive economic growth with strong support from Beijing and implementing a finance mechanism, known as the AIIB (Asian Infrastructure Investment Bank).Yet constructing new roads, bridges, railroads, power plants, shipping ports and so much more can be very costly. And what’s the financial benefit for investors or sovereign governments that pour funding into such projects?Constructing infrastructure has to have an end goal in mind, such as boosting cross-border trade and investments, providing preferential tax and regulations treatments for investors and most importantly if loans are offered the creditors should expect to see the debts paid off.Nevertheless, it’s understandable many poor countries could struggle to repay debts in a timely manner and that’s why the Chinese government has offered to help nations in Africa and elsewhere to write off some of their bad loans.Asia News had posted a story on it.http://www.asianews.it/news-en/Xi-Jinping-writes-off-interest-free-loans-of-African-countries-50382.htmlAccording to Asia News:“China will write off all interest-free loans advanced to African countries due this year. Chinese President Xi Jinping made the announcement by video-conference during the Extraordinary China-Africa Summit on Solidarity Against COVID-19.With respect to commercial sovereign loans, the Chinese leader urged Chinese financial institutions like the Export-Import Bank of China and the China Development Bank to consult to come to some arrangements with African countries.”A large tranche of loans to African governments were provided by Beijing - ‘interest free.’ Now if a villainous creditor had sought to engage in ‘debt trap diplomacy’ they would have heaped on excessive banker’s transaction fees and charged high interest rates.The ‘debt trap diplomacy’ argument makes no logical sense, but how did it get started and later spread by an ‘echo chamber’ of the Western media and thought leaders? Well, former White House National Security John Bolton, a neoconservative mouthpiece, was the key instigator here.He granted an exclusive interview to Breitbart News to claim Beijing held deviant motives to launch the BRI.https://www.breitbart.com/radio/2018/03/02/bolton-south-china-sea-belligerence-rising-military-budget-show-china-not-pursuing-peaceful-rise-strategy/Bolton is quoted as saying:“‘They are buying assets that they need in their manufacturing sector. Unlike most companies or even countries, they don’t buy their requirements for a particular mineral; they buy the whole mine in Latin America or Africa,’ he noted.‘They’ve got what they call the ‘One Belt, One Road’ initiative to try and tie Central Asia into China, away from Russia, away from India,’ he continued. ‘They’ve got the ‘Maritime Silk Road,’ they call it, that’s part of that as well.’”But it should be noted Bolton was fired from his White House posting. The then-President Donald J. Trump claimed Bolton was trying to spark US wars in Iran, China, Russia, North Korea, Syria and etc.The conspiracy of falsehoods about BRI marches ever and onwards. There’s a saying “the truth shall set you free.” Eventually, people will know the real story about the BRI and they will discover that it has delivered enormous benefits for our world.Many developing countries can enjoy more prosperous days on account of China helping to build vital infrastructure in their respective nations and regions.WeChat: 86 13439758718

Because they've earned it.Seriously, "some people" are small government libertarian types. The politicians who draw their ire desire the citizenry to behave as they want them to vice how they wish to. This could be prohibition of marijuana or taxing gasoline to force people to drive smaller cars, it makes no difference, this is equal opportunity partisan interference. To achieve this behavioral change they use the power of government to annoy, prohibit, tax, jail those who do not share the politicians viewpoint. This is viewed as infringement of liberty and is cause for scorn.Oftentimes politicians just screw things up. Case in point. Today I read Bank of America and Wells fargo will charge for using a debit card. "This is stupid," I think. Clearly a Bank making a cash run at the expense of the good will of its customers. But Not so Fast... it turns out Bank of America is responding to Congress capping interchange fees. Why did congress do this? Well Dick Durbin the sponsor says ..."After years of raking in excess profits off an unfair and anti-competitive interchange system, Bank of America is trying to find new ways to pad their profits by sticking it to its customers," ...It's overt, unfair, and I hope their customers have the final say."This may seem somewhat reasonable, especially to those protesting on Wall Street. Except before this, the market self regulated. If fees were to high, businesses wouldn't accept the transaction. Someone offers a service and at a price. You take it or leave it. Walmart a contributor to Durbin though wanted to bypass the market and have the fee regulated down so retailers could increase their profit per transaction without having to negotiate with B of A. This profit won't come out of Durbin's pocket. Indeed his pockets are fuller now with contributions. It won't come of B of A's pocket. No. It's coming out of my pocket and other debit card users. In essence Dick Durbin rerached into my pocket and will remove $120/year to give to retailers in return for campaign contributions. Thanks Mr. Politician. I hate you.I hope this answers your question.