When we buy woolworths Wish cards through an online discount portal such as Raa , Cashrewards etc and pay with Amex, what is the merchant fee as a percentage that Woolworths get charged by Amex for selling the Wish cards.
I know with restaurants it is 2% or 3% of the total sale that the store owner has to pay Amex.
For a $50 meal paid with an Amex card, the merchant will be charged $1 at 2% fee.
I'm guessing that WW are charged around 1%?
Wanna have another go at this question? Doesn't make sense.
any better?
Thanks
Question is fine, what merchant fee does woolworths pay Amex.
I would think much less than 1%. When your revenue is 59 billion dollara you can probably pay what ever you like.
The Amex merchant fee will likely be the same regardless of what is purchased. Oxo stock cubes would have the same fee as a gift card. Amex can't identity the individual items sold.
Question is fine
Did you see the org or the 'updated' question?
I don't think you'll get an answer to your question unless someone from the Woolworths finance team or their Amex account manager is willing to publicly disclose it and maybe lose their job.
good point.
I would guess Woolworths do not make much of a contribution to Amex 10 billion revenue over the last few years. More likely the smaller businesses.
For all we know Amex may pay Woolworths a fee to persuade them to accept Amex transactions. Who knows.
https://www.michaelwest.com.au/how-amex-paid-no-tax-in-nine-…
what is the merchant fee
When buying them, you get charged 0%
I'm guessing that WW are charged around 1%?
No one other than woolies and Amex knows, but its assumed around 1% or even lower.
It doesn't matter really, as these 'fees' are built into the prices and you the customer are charged nothing extra.
It only matters to me/us when negotiating with Amex re retaining you as a card member, it is always good to know what revenue you are generating for them before accepting X amount of points, gift cards or spend incentive to your card.
Are you talking as a card holder or as a seller?
If you think you can get a 'better' deal as an Amex card holder, then sure go for it. No harm in asking!
I would work on approx 1.2-1.5% on all your spend, as most retailers fall into either 1% or 2% range for amex. The bigger ones are at the lower scale.
Let us know if you get a better deal ;)
My guess is it goes something like this;
AMX to WW: You can be an AMX merchant!
WW: We don't need to accept AMX as everyone has a different card anyhow. It only benefits us with a very small number of sales in CBD areas. Because of the rate card, we will decline to accept AMX.
AMX: OK, as our colleagues have explained, we'll play swaps with on-costs and revenue in the Sechelles, BVI and Panama. Our people can work together to figure out how best to share the benefits and pad our bonuses, but only if we can do business.
WW: Yes, let's! We'll figure out what rate to charge once we agree on a model to run with…
So like most centralised corporates, they charge whatever launders more cash around the tax office and 'returns the most to shareholders' (and as we know, this is not always true by a long way).
Thankfully we know have the truth.
know
Now*
So you must be good at spelling as well as maths.
Woolworths must be giving some sort of kick back for the 3 points per dollar amex cards.
Great question budgetman.
Whilst I don't have any insider info (though I'd love to work in this field, this is the really fun stuff - AmEx, points, merchant systems, POS systems, chip/contactless/swipe tech, interchange systems, global integration, etc):
Woolworths would be seen by AmEx as a high volume, low margin merchant. So while they charge Woolworths peanuts (compared to small businesses like restaurants etc), the sheer volume of AmEx transactions that Woolworths process would still make it viable for AmEx.
Woolworths has done the maths and knows that this 5% discount is enough for people to keep them locked in to the Woolworths ecosystem (even after taking into account the merchant services fee from AmEx).
In related news, I notice that supermarkets and other big retailers still accept Diners Club cards. How many people actually still use these? I've never seen a Diners Club card in real life! Any OzBargainers with one?
Do you know where reward points come from? Can companies and financial institutions create them out of thin air in a similar way banks create money with double entry book keeping.
I dooo :)
Swipe only
No surcharge at:
Kmart
Big W
Woolworths
Officeworks
Harvey Norman
Shell
Coles
Coles Express
BP (also seems to give you a 2c off per litre discount if you tell them you're paying with Diners Club)
Also, JB if you forget to mention it's a Diners Club card - it doesn't seem like the surcharge is added automatically
As a reference you could look to the ATO's merchant fees:
The card payment fees are:
1.45% for American Express payments.
0.40% for MasterCard credit payments
0.15% for MasterCard debit payments
2.70% for MasterCard international payments
0.78% for Visa credit payments
0.15% for Visa debit payments
2.70% for Visa international paymentsThis fee is not subject to GST and is equal to the fee that the ATO incurs from its banker.
I would expect Woolworths have a similar fee structure
Interesting, thanks for that!
I'm calling Amex today to see what they are willing to do to keep me as a customer.
Will update the post later
Right,many people pay off tax with many Prepaid debit cards to earn more points now.It falls into 0.15% for Visa/MasterCard debit payments.
I guess this fee structure is probable the best a giant business can get.
It wouldn't be Woolworths being charged the fee, but the reseller.