Apple Card’s ‘elite card’ status hits retailers in the wallet

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Apple Card’s ‘elite card’ status is hitting retailers in the wallet
Apple Card is one of many cards that carry higher fees for retailers.
Photo: Apple

Some retailers are pushing back against “elite cards” such as Apple Card, a new Bloomberg report claims. These cards’ high-end status means the banks charge higher transaction fees, which offset various rewards programs.

Apple isn’t the only elite card that comes with higher fees for businesses that accept them. The article says a regular Visa card costs $1.27 in swipe fees for a $100 purchase. Meanwhile, a high-end Visa Signature card carries fees of $1.75. These fees are divided between the network, the payment processor and the issuing bank.

The explanation for being able to charge higher fees is that elite card owners have more spending power. Payment processor Auric says premium-branded Visa card holders typically spend $50 more on purchases than other customers.

Right now, retailers have no say in which cards they accept. If they want to accept any Mastercards, for instance, they have to accept all Mastercards. In total, costs associated with accepting electronic payments rose to $108 billion last year.

Elite cards: Not just an Apple Card issue

Although Bloomberg titles its article “Retailers Don’t Like Paying The Fees For Your Apple Card,” this isn’t specifically an Apple issue. Cupertino didn’t launch its Apple Card until the last half of this year. 2018 figures about the rising costs of intercharge fees therefore don’t result from Apple Card.

Nonetheless, Apple Card is classified as an elite card — which means that it’s contributing to the problem.

Some retailers have pushed back against the higher fees. Kroger supermarket last year banned Visa cards in certain stores because of the high costs of premium credit cards. (The company later reversed its stance after “months of negotiations.”) Litigation that started in 2005 argued that large merchants are breaking antitrust laws by ramping up swipe fees.

Do you use an Apple Card? What do you think of it so far — either from a customer or retailer perspective? Let us know in the comments below.