I’ve noticed lately credit card terminals in the South Florida area are down more frequently. I’ve also noticed that if a credit card swipe machine is down in one restaurant, it will be up next door. So, it’s not that the phone company has been having trouble with their wires. There’s no rhyme or reason to it. Totally random.
Other credit card-related things I’ve noticed: restaurants offering 10% off if customers use cash, and gas stations giving $.05 off if you pay with cash.
Just to give you a day-in-the-life example: I parked my car in a garage that takes credit cards. As I pulled in, there was a sign on the machine that said, “Cash only today. Credit card machine down.” Okay. I went to the ATM, and had to pay a $3 usury fee to witdhraw $40! And this does not count the fee my bank would end up charging me on the back-end for taking money from another bank. Ah, the disadvantages of banking with a small, regional financial institution.
Later on, I went to Subway for lunch, and they had a sign up that said, “Cash only. Credit Card machine down.” I asked the cashier if the outage was related to the parking garage across the street. The guy said, “No. It’s something wrong in the back.” I could tell he was frustrated. “Yeah, man,” he said. “We’ve lost a lot of customers today.”
So, the two credit card machines being down were unrelated? And the ATM nearby was working, so it wasn’t the phone/data lines.
So, why are credit card terminals seemingly down at random intervals? Here’s my conspiracy theory: since the banks now have a cap on how much they can charge a retailer for processing a credit card, thanks to Dodd-Frank, they are looking for different ways to pass those costs unto us, the consumer. The banks are randomly cutting off access to POS terminals so that consumers are forced to go to the ATM. The banks then hit us with their hiked their ATM fees in order to make up the lost revenue.
So, it costs me more money to access my own cash. My $1 is actually worth $.97 or whatever, depending on how much I withdraw. Bad enough we have inflation, now I have money charges.
Sounds like a great “investment” for the banks. And a nightmare for consumers.
The good intentions of the Dodd-Frank bill have failed us. Before, the cost of credit card transactions were hidden in the price. Now I have to get slapped with a $3 ATM fee on the front end, and a fee on the back end. ATM fees have gone up like the price of gas!
So, now I have to be like the Brinks man and carry around bags of cash to do transactions? Is this the return of the money clip in my pocket?
Anyway, back to the point: much like how the cell phone companies throttle data, slowing down video and audio streaming for heavy 3G users, I think the banks are throttling how many transactions they manage. This forces random retailers to take cash only, and forces random consumers who do not carry around money to go to the ATM and get hit with super-high ATM fees.
Anyway, by forcing consumers to hit the ATM, the banks are making up their lost revenue.
It’s funny: Damian mused the other day that the banks would not be able to hide the increase in fees. Well, turns out they are not. They are just increasing our inconvenience (retailers and consumers) and raking in the ATM fees. The banks win. We lose. Dodd-Frank fails.