| GUN TO HEAD CARD SWIPE!!! The credit card swipe fee is a good example of free market thinking, which very few truly understand today. As a committed free market thinker I believe the government should just butt out of the whole credit card swipe fee matter, but I know it won't. Good intentions are always subjective and not free market thinking. A banks survival depends on making a profit, but the retailers that is charged the swipe fee is not forced to pay the fee. So, what is the problem with that? There is no gun to the retailer's head making him use the service. That is a balance between a buyer and a seller and it will always work itself out and seek a natural level if the government just butts out. The retailer can pass the cost on or just completely refuse to participate. The retailer can give cash discounts for paying cash or unlimited ways to deal with the situation. But, in the end the banks can never charge more than the free market place can bear and stay in business. It is government control that distorts and destroys a natural balance between the buyer and the seller. With government involvement what can happen is fewer and fewer bank will offer customer friendly innovated card services in the future. I have no gripe either way. I consider myself just a free market place thinker and not a judge or jury either way. But, the trend and norm today is to do the right thing and be fair which in the end always creates inefficiency and excessive waste. SIRMANS LOG: JUNE 8, 2011, 0851 HOURS |
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