Asklemmy

44148 readers

1482 users here now

A loosely moderated place to ask open-ended questions

Search asklemmy 🔍

If your post meets the following criteria, it's welcome here!

Open-ended question
Not offensive: at this point, we do not have the bandwidth to moderate overtly political discussions. Assume best intent and be excellent to each other.
Not regarding using or support for Lemmy: context, see the list of support communities and tools for finding communities below
Not ad nauseam inducing: please make sure it is a question that would be new to most members
An actual topic of discussion

Looking for support?

Looking for a community?

Lemmyverse: community search
sub.rehab: maps old subreddits to fediverse options, marks official as such
!lemmy411@lemmy.ca: a community for finding communities

~Icon~ ~by~ ~@Double_A@discuss.tchncs.de~

founded 5 years ago

MODERATORS

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

submitted 1 year ago by kaladininskyrim@kbin.social to c/asklemmy@lemmy.ml

7 comments fedilink hide all child comments

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?

you are viewing a single comment's thread
view the rest of the comments

[–] lagomorphlecture@lemm.ee 13 points 1 year ago* (last edited 1 year ago) (2 children)

I'm not familiar with this so take this with a grain of salt because I'm just guessing. Let's say your CC is with Visa and T-Mobile has this offer going. You sign up for it and the fine print says that Visa gets to send T-Mobile details of your purchases. How much information I don't know. They might just send a total of eligible purchases or they might send a lot more. Then, Visa sends them some amount of $ for each eligible transaction which is more than the cash back they're giving you. Visa is ok with this because the more purchases you make the more interest you're likely to pay them so everyone is making money but you.

[–] evatronic@lemm.ee 27 points 1 year 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.

[–] doc@kbin.social 5 points 1 year 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¢.

[–] shakcked@lemm.ee 5 points 1 year ago

I'll also add that spending habit data is very valuable in terms of advertisement. We are in the age of very targetted advertisement. Just a random example: *user14555* on our T-Mobile app eats at a restaurant for lunch every Thursday. Have the app pop-up with a coupon from one of our participating restaurants on Thursday morning.

Restaurant will pay or give exclusive coupons to T-Mobile in exchange for these benefits. T-Mobile then hopes to entice more users by listing their app and "exclusive coupons" as unique benefit to using them as a cellphone provider. All the major providers have more or less settled at similar prices for cellphone plans so they lean on these extras as marketing tools.