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Ask HN: Do we need to pay billions in fees to Stripe, Block, PayPal and Visa/MC?

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Re: Ask HN: Do we need to pay billions in fees to Stripe, Block, PayPal and Visa/MC?

#151

Post by jakub_g »

BeetleB wrote: post #48
thesausageking wrote: post #39

Earlier 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.

> For a 3% discount, It is fantasy to think they'd get a 3% discount. The goods in stores that take only cash do not tend to be cheaper than those that do. They know what people are willing to pay and will charge the price. If they see people are willing to pay $99 with a credit card, then they'll be willing to pay that with cash.

In Poland, the default way for computer shops in 2000-2010s was to offer 2% discount when paying in cash. (The prices displayed were assuming cash, so if you paid by card, you'd pay more.)

I didn't see this anywhere else though. It probably made sense for computer shops because most transactions one would do there would be sporadic, big, and planned.

(Since then, the Mastercard/Visa fees went down to 0.2-0.3% due to EU rules, so probably those discounts are less popular now).

Re: Ask HN: Do we need to pay billions in fees to Stripe, Block, PayPal and Visa/MC?

#152

Post by reboot81 »

I wonder what EU will come up with in the future, some kind of digital cash? Private transactions that must work instantly with all banks doing business in the EU? Several countries here have their own solution, but none of them are compatible with each other. (Please correct me)

Re: Ask HN: Do we need to pay billions in fees to Stripe, Block, PayPal and Visa/MC?

#153

Post by BeetleB »

devman0 wrote: post #96
BeetleB wrote: post #48

Earlier quoted context omitted.

> For a 3% discount, It is fantasy to think they'd get a 3% discount. The goods in stores that take only cash do not tend to be cheaper than those that do. They know what people are willing to pay and will charge the price. If they see people are willing to pay $99 with a credit card, then they'll be willing to pay that with cash.

I think the issue here is who is paying the fee and where is the fee surfaced. A free market solution would work here, but it requires some regulating to create the transparency required. Everyone pays their own credit card fee as a line item on the receipt, merchants are required to print it on the receipt. If customers actually had to pay their own fee's on each swipe you'd see a lot less people reaching for the Pl…

Technically the merchant is paying the fee, and he perhaps is passing some or all of it to you.

The reason merchants might not pass it all to you if that they get a lot more sales volume when they support credit cards, so they can still be more profitable while paying for some of those fees.

I know I'm going to get hated for saying this, but the businesses that charge extra for credit card use under $10 are trying to extract as much out of you - they're aiming to get the best of both worlds. The price of their goods are still such that they're assuming you'll pay with a card.

At the end of the day a business has several costs. Rent, cost of shipping, utilities, etc. When these go up so do the costs of goods. Credit card fees are no different in that regard. If they hated it that much they wouldn't support credit card payments. They do support it because then know it'll bring in more revenue than without - and will easily pay for itself and more.

Re: Ask HN: Do we need to pay billions in fees to Stripe, Block, PayPal and Visa/MC?

#154

Post by m463 »

miki123211 wrote: post #149
oldprogrammer2 wrote: post #9

Stripe, 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…

Most countries that aren't the US basically did this, in one way or another. There are multiple ways of doing so, two-factor authentication (think 3d secure) is one, an oAuth like system where you log in to your bank on their website and consent to a wire transfer is another. There are variations on these ideas, the system we have here gives you a 6-digit code in your banking app which you can enter on any device, tr…

> Most countries that aren't the US basically did this, in one way or another.

Most countries that ARE the US put the burden on the business and the credit card companies, and limit the liability to the credit card holder ($50 max, sometimes $500)

I've known people in other countries that lost money and they were SOL in comparison. Maybe they have cheaper transaction fees.

Re: Ask HN: Do we need to pay billions in fees to Stripe, Block, PayPal and Visa/MC?

#155

Post by zeroCalories »

oldprogrammer2 wrote: post #9

Stripe, 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…

These systems act as sort of a fraud insurance. I think in an ideal world we would have low friction low cost money transfers, but people could purchase insurance against fraud. There are complications to this, such as how to be both efficient and avoid abuse, but it would simplify every day life not having to think about a million different payment systems.

Re: Ask HN: Do we need to pay billions in fees to Stripe, Block, PayPal and Visa/MC?

#157

Post by BeetleB »

jnordwick wrote: post #64
BeetleB wrote: post #48

Earlier quoted context omitted.

> For a 3% discount, It is fantasy to think they'd get a 3% discount. The goods in stores that take only cash do not tend to be cheaper than those that do. They know what people are willing to pay and will charge the price. If they see people are willing to pay $99 with a credit card, then they'll be willing to pay that with cash.

> The goods in stores that take only cash do not tend to be cheaper than those that do. In NYC they most definitely do. A lot of the corner stores will change you less with cash. I'm not sure it is a the card payment or that they are keeping the sale off the books, but something that might cost me $18.50, I'll pay $18 for.

When I wrote that comment I knew someone would come out and use New York City as a counterexample.

The reality is except for a few of the really major cities those types of stores are usually more expensive than their larger counterparts in virtually all other cities in the US.

In my city I'm not going to get cheaper groceries by going to the smaller stores. They are more expensive regardless of whether they support credit cards or not. They may be superior and certain other aspects but price is not one of them.

My guess is the opposite may be true only in places where owning a car is expensive or inconvenient.

Re: Ask HN: Do we need to pay billions in fees to Stripe, Block, PayPal and Visa/MC?

#158

Post by warkdarrior »

konschubert wrote: post #112
devman0 wrote: post #100

Earlier quoted context omitted.

You said you don't want the ability to do chargebacks, but chargebacks solve two different problems: 1) origination fraud (i.e. someone not you originates a transaction from your account) and 2) merchant fraud (i.e. goods not as described/unsatisfactory/undelivered). It's fine if you say, yeah I can do without #2, but realistically you cannot do without #1 in any digital payment scheme that will have wide acceptance…

1) can also be solved with limits and increasing levels of authentication.

Sure, tell me the limit that has no fraud detection, so I know how many card numbers I need to steal.

Re: Ask HN: Do we need to pay billions in fees to Stripe, Block, PayPal and Visa/MC?

#159

Post by warkdarrior »

matwood wrote: post #82
kleinsch wrote: post #78

Earlier 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.

Funny aside. Anytime my CC has been stolen the thieves always go grocery shopping first, I assume for alcohol.

It's the easiest way to test a card, before going to the Apple Store.
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