Reply #44: I think a variety of things [View All]

Just the fact the bank has to buy the hard currency to have available is not real cheap. I am really not sure of EVERYTHING banking has to pay for to provide hard currency. I do know they pay about 2% above the face value of the cash just to get it. Add in the transport, the cost of human labor to maintain ATM's and teller windows. I had the president of a credit union tell me about 8 years ago it takes about 5% to provide hard currency. This is why so many banks are pushing FREE online banking. they do have to invest in and maintain the servers and software to do these transactions, but it run around 0.7% of the value of all the money that flows via electronic transfer. As for credit transactions. The 2-3% they charge the merchant less than 1% goes for the equipment and personnel to on a variety of fronts to make it all work. The other 1-2% they charge the merchants is profit - which helps lower the rate paid by cardholders and makes it possible for banks to float people who pay all the money every month until the due date on the bill.