Why can Las Vegas Hotels do What VISA and MasterCard Cannot?


[repost]

During a recent stay at The Bellagio Hotel in Las Vegas, I noticed that guests are provided with a oppotunity to charge transactions to their room, or any other hotel in Las Vegas that is owned by the conglomerate.  The transaction is very easy – you just select from the list of hotels, sign your name and write your room number. It is that easy and super-fast.

The hotels are smart. They are trying to reduce their individual merchant interchange fees,save money and be convenient for guests.  Rather than charge each transaction during your stay to a credit card, the hotel is acting as it’s own electronic payment network. This affords just one total transaction to your charge card as you check out.  Rather than having several micro transactions, the hotels save significant interchange fees by having the credit card associations charge the card just once.

This procedure also calls into play why interchange fees are unfair.  The Bellagio like many retailers offering gift cards and handling their own electronic payments demonstrate why Visa and MasterCard’s pricing cartel is antiquated.  If  the Bellagio can handle these transactions and connect with sister hotels along the Las Vegas Strip, think of the card associations’ member banks.  Often, the acquiring and issuing banks are the same, yet they charge for each part of the transaction.  Along with Visa and MasterCard’s discount rate, their system is broken and needs to be fixed.

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