Hacker News Board Hacker News, browsed like a classic message board
Live data from Hacker News

Forget Google, time to end the Visa-MasterCard duopoly

medium.com

Post reply on HN
Print view View original

141–150 of 547 posts

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

#141

Post by jedberg »

arrty88 wrote: post #132
jariel wrote: post #44

Earlier quoted context omitted.

"The 2% cashback has to come from somewhere." Yes, but in reality, the program comes from an upside down approach to overcoming the obviously anti-competitive practices that VISA/MC use to forbid retailers from offering discounts for not using VISA etc.. You can't say "Get 2% if you use cash instead of VISA". (Notice that nobody ever advertises that?) Because VISA doesn't allow it. You also can't say "$1.99 + 20 cent…

You’re correct in 99% of cases. Somehow gas stations can advertise different prices for cash.

Since Jan. 27, 2013, all retailers have been allowed to charge a fee for using credit. However, there are a lot of rules which are hard for regular retailers to follow, but easy for gas stations to follow, which is why you mostly only see it at gas stations.

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

#142

Post by apta »

e9 wrote: post #106
alt_f4 wrote: post #80

Earlier quoted context omitted.

It's not though. No one is forcing you or anyone else to sign up for credit cards - it's a choice, unlike taxation.

you can't rent a car without credit card, they won't accept debit card or even debit VISA/MASTERCARD, it has to be full on credit card

Other than renting a car or a hotel room, it seems you can conduct most if not all of your affairs without a credit card. Credit cards can be relegated to those limited transactions.

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

#143

Post by apta »

sdenton4 wrote: post #88
alt_f4 wrote: post #80

Earlier quoted context omitted.

It's not though. No one is forcing you or anyone else to sign up for credit cards - it's a choice, unlike taxation.

It's not optional, though. I still have to pay the higher transaction costs even without a credit card, because the credit card companies require that vendors have the same prices for card or cash, resulting in higher prices for everyone.

I've seen stores (e.g. electronic stores) offer reduced prices when paying in cash vs. credit card. Is this law only in the US?

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

#145

Post by [deleted] »

jariel wrote: post #44
ComputerGuru wrote: post #37

Earlier quoted context omitted.

Interchange fee pricing is set based on how much MasterCard charges the bank That’s not true though, or at least is a massive oversimplification. In the US, interchange fees are extremely inflated to allow banks to recuperate the rewards they give out to distinguish their card offerings from one another. The 2% cashback has to come from somewhere.

"The 2% cashback has to come from somewhere." Yes, but in reality, the program comes from an upside down approach to overcoming the obviously anti-competitive practices that VISA/MC use to forbid retailers from offering discounts for not using VISA etc.. You can't say "Get 2% if you use cash instead of VISA". (Notice that nobody ever advertises that?) Because VISA doesn't allow it. You also can't say "$1.99 + 20 cent…

[deleted]

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

#146

Post by matthewdgreen »

crazygringo wrote: post #45

I don't get it -- Amex and Discover are still providing healthy competition, so the "duopoly" the author complains about seems to be largely irrelevant. Competition between cards is thriving and consumers benefit -- witness the miniscule transaction fee the credit card companies keep after paying your rewards back of 2% to 5%, when you pay your bill on time. The article's main point is that such large companies are a…

Every time I pay for something in cash at a store, I’m paying for those 2-5% rewards, even though I won’t partake in them. This happens because the credit card companies, by dint of their crushing market power over small retailers, can force stores to charge identical cash and credit prices. I suppose a well-functioning competitive market would fix this problem, but weirdly enough Amex and Discover don’t seem interested on competing to offer a better deal to retailers.

Credit card fees and rebates are such an amazing example of how systems can fool human beings. The entire system clearly could not exist in a frictionless, well-functioning marketplace —- but people seem hard pressed to actually figure out how the whole thing works. It’s kind of brilliant.

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

#147

Post by Rebelgecko »

shkkmo wrote: post #127
cynix wrote: post #120

Earlier quoted context omitted.

> You can't say "Get 2% if you use cash instead of VISA". (Notice that nobody ever advertises that?) Because VISA doesn't allow it. > You also can't say "$1.99 + 20 cents processing charge" - no, the price must be listed including charges. (Notice that nobody every does this?) We see these a lot in Australia. I wish they'd enforce the same pricing here for cash and card — I don't like to carry cash around, and I hate…

> I don't like to carry cash around, and I hate it that I have to pay a surcharge when paying by card. So you think your use of a credit card should be subsidized by people who pay in cash?

I wonder how much more expensive credit cards actually are? Cash costs money/time to handle and deposit, it's easily stolen, and easy to commit fraud with (like the classic move where a drive thru employee pockets the cash from a sale without ringing it up)

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

#148

Post by akira2501 »

matthewdgreen wrote: post #146
crazygringo wrote: post #45

I don't get it -- Amex and Discover are still providing healthy competition, so the "duopoly" the author complains about seems to be largely irrelevant. Competition between cards is thriving and consumers benefit -- witness the miniscule transaction fee the credit card companies keep after paying your rewards back of 2% to 5%, when you pay your bill on time. The article's main point is that such large companies are a…

Every time I pay for something in cash at a store, I’m paying for those 2-5% rewards, even though I won’t partake in them. This happens because the credit card companies, by dint of their crushing market power over small retailers, can force stores to charge identical cash and credit prices. I suppose a well-functioning competitive market would fix this problem, but weirdly enough Amex and Discover don’t seem interes…

> I’m paying for those 2-5% rewards

Well.. you're paying a 2-5% higher price, but the merchant gets to keep all of that; it's not as if they have to also pay that fraction into their transaction processor.

> I suppose a well-functioning competitive market

You ever see retailers that offer a discount card? Like, spend $50 here get $10 off in the future? Typically they'll only offer those for cash transactions. This is why.

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

#149

Post by bretpiatt »

Laremere wrote: post #25
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 va…

> No factory is going to use credit card when buying $100,000 worth of parts from a supplier.

I have a business who uses a credit card every month to buy more than $100,000 worth of materials from a supplier.

On the consumption end the card programs are wonderful, great purchase protection negotiated, delay on actual payment for additional working capital, and rewards. We basically never have to use cash for employee travel expenses, all via points.

There is no benefit for me paying my suppliers via ACH, wire, or check.

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

#150

Post by toast0 »

Rebelgecko wrote: post #147
shkkmo wrote: post #127

Earlier quoted context omitted.

> I don't like to carry cash around, and I hate it that I have to pay a surcharge when paying by card. So you think your use of a credit card should be subsidized by people who pay in cash?

I wonder how much more expensive credit cards actually are? Cash costs money/time to handle and deposit, it's easily stolen, and easy to commit fraud with (like the classic move where a drive thru employee pockets the cash from a sale without ringing it up)

The computerization of order taking and kitchen tickets would seem to make it harder to charge a customer without ringing it up? I know you could cancel it in the system, but that's gotta be counted somewhere where a manager is going to see it eventually?
Post reply on HN