As Tasha Cain slid her credit card into the pump before fueling up her silver Infiniti on Wednesday, the digital readout showed she was paying nearly $4 per gallon for premium unleaded.
But it didn’t show her the various groups — among them oil companies, governments and sometimes even banks — that get a piece of that money.
As gas prices rise, banks and financial companies that process credit and debit purchases also are making more money.
Banks and payment processors charge gas stations on average about 2 percent of the total when motorists pay with plastic, or about 7 cents per gallon of regular unleaded at current prices.
“That doesn’t sound like much, but when you think of the millions of gallons [sold] on a daily basis the cost is astronomical,” said Mike Thornbrugh, manager of public and government affairs for QuikTrip, which has 120 stations in metro Atlanta.
Nearly 80 percent of QuikTrip customers pay with plastic. QuikTrip profit margins are about 8 cents to 9 cents per gallon regardless of the gas price, Thornbrugh said.
Banks say plastic payments reduce the amount of cash in a store, make transactions safer and help merchants run more efficiently with fewer personnel. But there’s a cost.
Major processors like MasterCard actually enacted fee caps on fuel purchases a few years ago to help retailers.
“For only pennies per dollar in sales, the credit and debit card service retailers pay for allows gas stations to securely run a dozen or more pumps all day, all night, every day of the year with only one or two people on site,” said Joe Brannen, president and CEO of the Georgia Bankers Association.
Debit card fees are currently under the microscope of the Federal Reserve, which has proposed a hard cap of up to 12 cents per transaction. While retailers applaud it, banks say that cap wouldn’t cover costs and would amount to price fixing.
The cap could go into effect this summer, but two bills pending in Congress seek to delay implementation.
Odysseas Papadimitriou, CEO of CardHub.com, a credit card comparison site, said interchange fees tend to be higher at gas stations than at other merchants. Banks price it higher, he said, because of the risk of fraud.
Consumer spending could be curtailed elsewhere as fuel prices climb, but card companies will probably still see a net gain in revenue because of healthier fees at the pump, he said.
“They’ll come out a little bit ahead,” Papadimitriou said.
Cain, who fills up twice a week, said “I think generally gas prices are ridiculous. Banks get enough money from everywhere else.”
are about 8 cents to 9 cents per gallon regardless of the gas price, Thornbrugh said.
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