USA Today features an article on the convenience – and hidden costs – of no signature small dollar credit card transactions. CardWeb.com estimates that the number of small dollar transactions has increased elevenfold since 2000.
Card companies are increasingly allowing no-signature transactions for
purchases of less than $25 at movie theaters, pharmacies, convenience
stores and fast-food restaurants. Their goal is to speed up the
checkout process and get more people to pay for everyday items with
plastic. [Excerpt from USA Today]
Merchant Perspective
BENEFITS
- Faster checkout
- Higher spend on plastic vs. cash
COSTS
- Transaction fees (1.8 – 2.4%)
Consumer Perspective
BENEFITS
- Convenience
COSTS
- Risk of increased debt as more and more transactions migrate to credit
- Higher prices as merchants pass on transaction fees
Buyers whip out plastic for small stuff
By Kathy Chu
USA TODAY
10/10/2006
