Debit/ID cards for illegals (Oakland, Montclair: lawyer, taxes, place to live)

[sonarrat]

Originally Posted by Mr. Fantastic

Says the guy who believes $15 per head is enough to support a complex EFT system "for profit" in perpetuity.

All debit and credits cards have per-transaction fees paid by the merchant. There are additional fees built in for cash services. I don't even know why I'm responding to you; you have some gall in accusing me of ignorance when you didn't absorb the simplest facts. You are nothing more than a troll.

[Mr. Fantastic]

Originally Posted by sonarrat

All debit and credits cards have per-transaction fees paid by the merchant.

You do realize you just sunk your own point, right genius?

"Fees paid by the merchant". Why should merchants be forced to subsidize an electronic funds system for illegal aliens?

[Tallysmom]

Originally Posted by Mr. Fantastic

You do realize you just sunk your own point, right genius?

"Fees paid by the merchant". Why should merchants be forced to subsidize an electronic funds system for illegal aliens?

Merchants pay fees on all debit and credit card transactions. That's why you see 50 cents a transaction for debit cards at some places. Merchants would love to be able to surcharge for credit cards, but the legal language in their contracts say they aren't allowed to charge more for credit card payments -- or discount for cash, although there are ways around that.

So yes -- if Oakland does this ridiculous debit card thing, merchants will pay fees....

[jade408]

So this program should pay for itself, and bring in additional revenue to the city's coffers. As long as the upfront costs are minimal, I am OK with having a new source of revenue.

Credit/debit card fees are typically anywhere from .5-5% of the purchase price.

[Pongmeister]

I have a feeling this is a minor positive for the city... This is strictly my hunch.

I am assuming there are unknown amount of "under the mattress" cash that illegal immigrants are holding on to (perhaps ~$1000ish per person). With the debit card, some of the money is funnel into the economy via purchases. Not a lot mind you but enough to move the needle. The sales tax should easily cover the implementation cost (one would think). It might be hard for some to phantom, but there are some modestly successful illegal immigrants with lots of loot. Moving from a cash-only society to plastic could be a HUGE benefit for both parties (illegal and city).

This is great news for local business despite having to pay the merchant fee. Merchant would obviously love it, as long as the purchases gross profit exceeds the merchant fee,which should usually be the case. Most shops have a minimum of $10 purchase (implicitly or explicitly) therefore, the transaction is net positive. Most of the dollars will be funneled through local shops rather than the likes of Wal-Mart.

[sonarrat]

Originally Posted by Mr. Fantastic

You do realize you just sunk your own point, right genius?

"Fees paid by the merchant". Why should merchants be forced to subsidize an electronic funds system for illegal aliens?

Those merchants will see a benefit from this because they're not spending as much of their paycheck on check-cashing fees at the local Payday Loan, Check Cashing, Pure Water, Prepaid Cell Phone, Notary, Lotto Ticket and XXX Video store. So they will have more of their money to spend on local businesses. And the stores would pay merchant fees anyway. If they don't want to "subsidize" an EFT system for illegal aliens, then they are free to operate on a cash only basis and see how far that gets them.

The more you fight me on this, the more you lose.

[Mr. Fantastic]

Originally Posted by sonarrat

And the stores would pay merchant fees anyway. If they don't want to "subsidize" an EFT system for illegal aliens, then they are free to operate on a cash only basis and see how far that gets them.

Wrong. You simply don't understand basic micro economic concepts. There is a reason why merchants try to enforce a minimum purchase price with debit card usage (illegally I might add). It's because for every hundred dollars, they kick back a percentage to the provider of the EFT provider, in this case a third party provider.

Either way, legal businesses are being used to subsidize illegal aliens.

Also Oakland is using this card as a municipal ID card for public services (library, hospital, clinics, etc). Services, we the tax payer are footing the bill for.

You want to take you foot out of your mouth now, or should I?

[Pongmeister]

"Fees paid by the merchant". Why should merchants be forced to subsidize an electronic funds system for illegal aliens? [/quote]

You are wrong on this one. Merchants are not subsidizing electronic funds at all, in fact they come out as the winner. Incremental merchant fees are paid by the Merchants for every additional transaction. Every additional transaction made under the program is almost by definition a net positive for the merchants.

Using very conservative number:
Average transaction purchase: $5
Gross Profit Margin: 30% (40% roughly pre-tax)
Proceeds before fee: $1.50

... all-in merchant fee has to be more than $1.50 for the merchant to lose money. My friend runs a local convenience, not high volume, and his all-in cost per transaction is $1.00 on debit (Wells Fargo Merchant). Again this is a very conservative model. A gallon of Milk and pack of Newport runs you north of $5 easy. My hunch is that a signifciant % of their consumption comes from food and basic necessity. So crossing the purchase minimum shouldn't be too hard. And lets me frank here, Visa and MA prohibits purchase minimum, but you see that all the time. So no, merchants do not lose out.

[Mr. Fantastic]

Originally Posted by Pongmeister

So crossing the purchase minimum shouldn't be too hard. And lets me frank here, Visa and MA prohibits purchase minimum, but you see that all the time.

Your point would make sense if this system was being implemented by a major provider like VISA who is able to profit from transaction percentages based on VOLUME and brand strengthening alone (i.e - VISA is already passing the cost down to their customer base). However that isn't the case for Oakland's program, this program is being run by some ho-dunk 3rd party contractor and the system is only in place for the city of OAKLAND. The margins don't work the same like they do for major providers like VISA.

Have you even taken a basic business course before?

[Pongmeister]

LOL, yes I have. Thanks for asking. And I think I know a thing or two about transaction processing, having been in the industry for a good time span.

Given your response, it's clear that you're in a different field and trying to speak beyond your comfort level. That has to be one of the the WORST response I have seen. I am not sure if I should even reply lol.

I'll be kind. I'll let you know that the margin assumption used are merchandise margin; I have no clue about your reference to "margin don't work the same, etc." I am not close enough to the details on the program, but the card will almost universally be used on the VISA/MA network for obvious reasons. I doubt you understand this but electronic payment is quite complex (Hypercom Pin terminal, TNS's dialup/broadband authentication, interexchange network linked to issuing banks). It's pretty clear that the outsourcing is for card issuing and administration (easy task) rather than "meaty" backbone stuff that is already in place.

Surely you dont think that this program will do the backbone work do you? They're going to issue terminals to every merchant in the city? Hypercom, Ingenico, and Verifone is going to support a third network to accomodate the city of Oakland? They're going to have internal clearinghouse based on a third-party Debit network that has no clear defined volume trend ? please

If they do go "rogue"... all a merchant has to do is put up a "NO XYZ Accepted" sign much like a "NO VISA/MA." So in the worse scenario you outline, the impact is ZERO.