Kenn (kenoubi) wrote,

Square’s service, which makes anyone with a smartphone into someone who can accept credit or debit cards, does not come free. You must pay it 2.75 percent of the transaction for the privilege of accepting plastic, though the person who swipes the card pays nothing.

Am I correct in thinking that most people would read this as "Square's fee is borne by the payee" and not as "Square makes the fee visible to the payee and hides it from the payer"? I see this kind of thing all over the place. It's not even conceptually coherent for a fee on a bilateral transaction to be imposed (by fiat) on one party or the other. What actually happens is that either the transaction no longer happens (because the fee is greater than the surplus value otherwise produced by the transaction) or the fee is split based on market conditions, not the intention of the entity imposing the fee. Yet I think people think Social Security and Medicare cost half as much as they do for the same reason (the arbitrary allocation of half of the payroll tax to "employer" and half to "employee").


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