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Forget Google, time to end the Visa-MasterCard duopoly

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Re: Forget Google, time to end the Visa-MasterCard duopoly

#21

Post by _8j50 »

Would be happy to buy a usable cryptocoin card. I was thinking about interest-free crypto-loans where the debtor would speculate on the value of the currency at the time it will paid off (like options trading). If you loan 100btc you would loan with the speculation that for example it would be 10% more valuable in a year. If in a year your speculation is correct, you break even, if the price is 10% lower, the debtee still has to pay using your speculated valuation, if the price is 10% higher you lost potential money you coulf have gained had you hold onto it. Either way, you have insurance against loss the debtee takes on risk but they don't get endlessly canibalized by interest payment. Escrow or credit rating is something I have not figured out.

Regardless, an acual card and a payment processing network would cost billions to deploy.

Re: Forget Google, time to end the Visa-MasterCard duopoly

#23

Post by drewbug »

grawprog wrote: post #18
random3 wrote: post #2

Cards still account for less than 18% of US payments (source https://go.plaid.com/rs/495-WRE-561/images/Plaid-Modern-guid... ).

Bet those stats go way up in the next few months as more and more businesses get on the refusing cash bandwagon. Apparently it's for 'safety' but I live in a country where my money's made out of plastic or metal, that shit can be sprayed or dunked in iso. The excuse seems pretty flimsy too when again, places don't seem to bother cleaning off their pinpads before the cashiers or other customers touch them anyway.

The other 82% is ACH, not cash

Re: Forget Google, time to end the Visa-MasterCard duopoly

#25

Post by Laremere »

random3 wrote: post #2

Cards still account for less than 18% of US payments (source https://go.plaid.com/rs/495-WRE-561/images/Plaid-Modern-guid... ).

From your source "More than 82 percent of the value of all U.S. payments goes through ACH"

Note that it's value, and not number of transactions.

Personally, I have only 4 things pay out of my checking account. Mortgage, HOA dues, and power are all bills that require checking account transactions for auto-payment to avoid credit card fees. These are very large transactions which will greatly skew any measurement by value.

The final thing paid out of my checking account is interesting: the credit card payment. Since any money I spend with my card necessarily is repaid from my checking account, that also greatly skews measurement by value.

If I spent 50% on housing, and spent all of the rest of my money on things with my credit card, then my personal ACH value percentage would be 66%. (1 unit house payment, 1 unit credit card transactions, 1 unit paying credit card bill)

This isn't even starting with business to business transactions. I'm unsure if the source is counting it in that metric, but it would further skew any value measurement. No factory is going to use credit card when buying $100,000 worth of parts from a supplier.

All those things considered, 82% seems about right, even if you assume something like 90% of consumer transactions use credit card.

Re: Forget Google, time to end the Visa-MasterCard duopoly

#26

Post by intopieces »

FTA:

> And it could potentially have been even worse. Had their few competitors also gone down, literally all electronic payments would have broken at once.

This... is not true. As noted by another comment here, a vast majority of the value transferred (82%) is ACH in the US.

Re: Forget Google, time to end the Visa-MasterCard duopoly

#27

Post by stevehawk »

grawprog wrote: post #18
random3 wrote: post #2

Cards still account for less than 18% of US payments (source https://go.plaid.com/rs/495-WRE-561/images/Plaid-Modern-guid... ).

Bet those stats go way up in the next few months as more and more businesses get on the refusing cash bandwagon. Apparently it's for 'safety' but I live in a country where my money's made out of plastic or metal, that shit can be sprayed or dunked in iso. The excuse seems pretty flimsy too when again, places don't seem to bother cleaning off their pinpads before the cashiers or other customers touch them anyway.

That stat won't change much in the US. It's illegal for a store to turn down cash.

Re: Forget Google, time to end the Visa-MasterCard duopoly

#29

Post by seibelj »

Unpopular opinion here (from my experience), but crypto / blockchain is ever so slowly and deliberately destroying the moat around payments and the artificial barriers constructed. Probably 5 more years for some very serious mainstream business movements into it, and 10 more for non-technical consumers, but I believe with the rise of stablecoins (USDC) and Ethereum scaling via proof of stake (ETH2) their days are numbered.

Re: Forget Google, time to end the Visa-MasterCard duopoly

#30

Post by jedberg »

tiffanyh wrote: post #20

I am reading so much incorrect information in this thread it’s maddening. The card network (Visa, Mastercard, etc) do NOT make money on Interchange. It’s hard to have a healthy dialogue on this topic if folks don’t understand the basics of how the card networks generate revenue. Below is a decent primer. https://www.investopedia.com/articles/markets/032615/how-mas...

I mean, technically no they don't. But that's just being pedantic. They charge the bank based on gross dollar volume, and the bank gets the money to pay for that from... interchange fees. The more volume the bank does, the more they pay and the more they get from interchange fees.

Interchange fee pricing is set based on how much mastercard charges the banks, so while technically true, the interchange fees are basically set by mastercard's pricing.

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