Visa and Mastercard both have net profit margins of around 50%. So unless you think they’re taking on vast commercial risk, which I don’t, then there’s no reason we should be paying so much in fees.
Ask HN: Do we need to pay billions in fees to Stripe, Block, PayPal and Visa/MC?
131–140 of 377 posts
Re: Ask HN: Do we need to pay billions in fees to Stripe, Block, PayPal and Visa/MC?
#132Earlier quoted context omitted.
You leave your credit card on the table at a coffee shop. A thief takes it and goes to the grocery store. You’re going to do a chargeback.
Yea I’m not proposing to replace low security credit cards with low security debit card this is a silly strawman. EDIT: I see the general problem of origination fraud. But that can be mitigated by imposing limits and requiring extra levels of authentication for bigger payments.
> EDIT: I see the general problem of origination fraud. But that can be mitigated by imposing limits and requiring extra levels of authentication for bigger payments.
Which are exactly the kinds of things credit cards do, but it can't be perfect so they still suffer losses, so they still have to charge a percentage.
(Of course a lot of the percentage can go to rewards programs, so we're talking about the percentage once those are accounted for.)
Re: Ask HN: Do we need to pay billions in fees to Stripe, Block, PayPal and Visa/MC?
#133Earlier quoted context omitted.
Yes - for example, Home Depot does not take tap payments yet.
This is something I find so fascinating about the American financial system... Home Depot in Canada has taken tap payments and Apple Pay for a long time now.
Yeah Home Depot is a bizarre exception, AFAIK they signed a contract with PayPal at some point long ago that prevents them from accepting tap-to-pay. Their checkouts have all the hardware for tap-to-pay, but contractually they can't turn it on.
Hopefully that contract ends soon, because wow did they shoot themselves in the foot on that one.
Re: Ask HN: Do we need to pay billions in fees to Stripe, Block, PayPal and Visa/MC?
#134At least 3 of those companies came into existence in relative recent history. If you think you have something to offer, then do it.
Re: Ask HN: Do we need to pay billions in fees to Stripe, Block, PayPal and Visa/MC?
#135Not at all. There are other solutions around the world that bypass the payment gateways and credit card acquirers. In Holland they have iDEAL, in Thailand they have QR Codes, in Australia they have BPAY and in China they have WeChat Pay. There are tons more around the world. As a merchant, it can be very expensive integrating directly with all the different options, which is where these companies help - for a fee. If…
Do those services also deal with fraud, chargebacks, etc., or are they basically digital cash equivalents?
If the systems are local to a specific country, they could reasonably skip the idea of chargebacks and just rely on the legal system to resolve any disputes?
Re: Ask HN: Do we need to pay billions in fees to Stripe, Block, PayPal and Visa/MC?
#136Stripe, Block, and PayPal each solved a massive pain point. PayPal provided a way to pay people and vendors without giving away your credit card number. Square made it easy to accept payment in person on a phone, without an extensive upfront underwriting experience and without expensive fixed monthly fees. Stripe did the same as Square, but for accepting online payments. Fraud and Risk come in many forms, and these p…
The challenger to these will solve for a different problem. Not every transaction needs complex fraud detection or being able for the customer do to chargebacks. For a 3% discount, would customers agree to use something that worked just like cash, where the transfer was instant and couldn't be undone? Then you don't have to worry about fraud, chargebacks, etc.
Lol
If you have an unprotected vector fraudsters will find and exploit it. They're literally paid to do so.
I've seen fraudsters that are ridiculously persistent to make $2,000 in a year. But they just keep poking at it at a certain point you're able to ramp that up to $80,000 in a month I know they're good it was completely worth it to him for several years.
How I've seen people spend hundreds of hours to generate a few hundred dollars worth of in-game currency or on-site reward points.
Re: Ask HN: Do we need to pay billions in fees to Stripe, Block, PayPal and Visa/MC?
#137This is why I was excited about Libra (later renamed to Diem.) which was Meta's feeless digital currency that was scrapped. It could have been a Western WeChat Pay, which charges no fees up to 200 RMB ~= 20 GBP. I don't see why they should get to shave a slice off of every transaction. It takes relatively little upkeep and they rake in huge profits. The fees nudge businesses to use cash (well, to avoid tax too, somet…
Cash has a processing cost to business as well, sometimes more than card processing fees. Not only do you have to pay to deposit, you have to store it, count it, secure it and transport it.
You also have to “buy” change. Banks don’t give bulk change that a cash business needs for free. You have to purchase standard denominations to give as change
Re: Ask HN: Do we need to pay billions in fees to Stripe, Block, PayPal and Visa/MC?
#138You know what I find odd? The fact that we don't seem to have nice payout services that I'm aware of, that would let me payout some money to a service provider from a platform accout, like "Hey, here is my bank account, here's their account and here's how much I want to transfer to their bank, give me an API to handle it without me needing to think about PSD2." PayPal requires the other person to either also have a P…
In the US, you can do an ACH transfer, bank account to bank account.
Some US banks support FedNow, which does roughly the same thing as ACH, but in seconds rather than days. It's not widely used yet. $0.045 per transaction.
Re: Ask HN: Do we need to pay billions in fees to Stripe, Block, PayPal and Visa/MC?
#139Earlier quoted context omitted.
It's probably just a cultural difference between (broadly) the US, Europe, and Asia. In the US it's increasingly uncommon to buy things with cash or cash-equivalents (Venmo, Zelle, etc.), especially high-value items. Basically we have very few consumer protection laws compared to the EU, and it's very much a "buyer beware" culture here. If you get screwed by a merchant, most of the time it's just too bad for you, unl…
Thanks for providing the context > paying with cash (which leaves you almost always without recourse if anything happens) One remark about this though: you always have recourse in court. We often hear the USA is incredibly litigious, but it's not like we'd not (threaten to) bring action against a merchant not acting honestly The main situation where I see chargebacks being useful is when you fell for a scam and the p…
Problem is that court action, even small-claims-court where lawyers don't need to be present (and may specifically be disallowed) is still significantly more effort than disputing a bank transaction.
Courts could be a useful substitute if the actual penalties were high enough that no merchant would dare even try a scam (then it doesn't matter if legal action is hard work, because the mere deterrent effect means you will never actually have to do it), but that's not the case.
Re: Ask HN: Do we need to pay billions in fees to Stripe, Block, PayPal and Visa/MC?
#140Earlier quoted context omitted.
The challenger to these will solve for a different problem. Not every transaction needs complex fraud detection or being able for the customer do to chargebacks. For a 3% discount, would customers agree to use something that worked just like cash, where the transfer was instant and couldn't be undone? Then you don't have to worry about fraud, chargebacks, etc.
You are missing the opposite side of the fraud picture: Where it's not the business scamming you, but someone taking your credentials and spending up to the limit in a store that deals with no chargebacks. This is, if anything, the larger size of the fraud losses for the Stripes of the world. Fake businesses that use the cards either for testing if the creds are good, or where the owners charge cards that they obtain…
Or further abusing your weak password on a site and then racking up a ton of charges to a product that they're capable of laundering in some way into money for them at any ratio.