New debit cards for unemployment benefits funnel more fees and customers to Bank of America
"The issues with credit card charges in general is that it's all about the small print," says Hut Landon, Executive Director of Northern California Independent Booksellers Association. As with the Bank of America EDD card, unadvertised fees can occur through usage of debit and credit cards. On top of a base percentage, merchants must pay fees for rewards cards, mileage cards, and are sometimes charged for transactions, Landon explains. There is even a fee for manually entering credit card information instead of swiping it. The debit card fee is sometimes less, but merchants still could be suffering from the EDD's new system.
"While this may be a good situation for Bank of America," says Landon, "[for merchants] its definitely not a good deal."
Joel Bleskacek, co-owner of Potrero Hill favorites Plow and Ruby Wine, tells the Guardian he pays between 1.5 percent and 3 percent for credit card transactions at his restaurant and wine store. That's a significant amount of money lost with each transaction, money that goes directly to the banks or credit card processors. "For what we're paying at the restaurant, I could hire a general manager to work if we only accepted cash," Bleskacek says. But credit cards are more popular than cash at both his establishments. "A vast majority is credit card sales. People don't seem to carry cash anymore. Same at the restaurant. An overwhelming majority of sales are through the credit card machine." Credit card company's earnings quickly add up. "Basically 2.5 to 3 percent of our entire economy is going to credit card companies...," he says. "Somebody's making some money."