Retailers Don’t Like Paying the Fees for Your Apple Card

The battle between retailers and credit card issuers wages on. The latest instigation: Apple and the Apple Card. Credit card networks and issuers are arguing that customers with 'elite' cards (all you Chase Sapphire Reserve and Apple cardholders, that's you) will spend more in store than regular cardholders so, naturally, stores should pay more fees.

...the card, marketed by Apple and backed by Goldman Sachs Group, is designated “elite,” which allows it to levy significantly higher interchange fees on each swipe or tap...Elite cards impose higher transaction fees to support generous reward programs for their customers...But the cards have long irked retailers. They have no choice but to pay the higher fees for elite plastic if they want to accept any of a network’s credit cards.
And merchants have begun arguing that there are categories, such as groceries, where premium cardholders don’t spend more than regular cardholders. The real beneficiaries of the rewards, they say, are the networks and issuers themselves.

When you consider how credit cards are processed (all cards are processed the same way) and how much money issuers and networks charge in fees for 'elite' cards as compared to traditional or debit cards, it is really quite unclear why swipe fees are different between card types on the same network. Unfortunately for businesses (particularly SMBs who receive the worst credit card rates around), the fees aren't likely to trend downward any time soon.


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