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

161–170 of 547 posts

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

#161

Post by koheripbal »

crazygringo wrote: post #73
briffle wrote: post #54

Earlier quoted context omitted.

Imagine if companies charged 2-5% less because they didn't have to fund CC company marketing tools like cashbacks.

That is common. My grocery store, my bodega, my doctor's office, my dentist -- they all offer a 5% discount for paying in cash. Obviously not everyone does it, but it's certainly not uncommon. On the other hand, there are also a lot of costs associated with handling cash. The expense of tracking bills and coins and going to the bank every day is not insignificant. So it's pretty easy to argue that there's no reason f…

That's a little different. They offer discounts of 5% because they then don't report the income and don't pay taxes.

The CC companies are only taking 2.5%-3.2%. If they're offering a 5% discount for cash - it's almost certainly tax evasion.

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

#162

Post by BenjiWiebe »

hn_throwaway_99 wrote: post #89
anamexis wrote: post #76

Earlier quoted context omitted.

Retailers can offer discounts for cash transactions, per the Durbin Amendment to the Dodd-Frank bill of 2010. https://en.wikipedia.org/wiki/Durbin_amendment

It depends on where you live. 10 states have laws that prohibit or restrict discounts for cash transactions: California, Colorado, Connecticut, Florida, Kansas, Maine, Massachusetts, New York, Oklahoma and Texas. Some of those restrictions have been invalidated by federal courts, but I was somewhat confused about which states were affected.

Perhaps this is explicitly allowed (you did say restrictions) but in Kansas it isn't uncommon to see gas station signs displaying a cash price and a card price.

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

#163

Post by cynix »

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?

> So you think your use of a credit card should be subsidized by people who pay in cash?

I don't think it should be so clear cut like that. The credit card processing fees charged by the processor is a cost of doing business and should just be factored into the pricing without being explicitly passed on to a subset of customers. For example, a shopping centre or convenience store may have toilets that only a subset of customers would use. Should the customers who bought something without using the toilet be "subsidising the cleaning costs"? If a store offers online ordering, should customers who ordered online be "subsidising the rent of the physical store"?

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

#164

Post by peteretep »

ajb wrote: post #28

Coincidentally I just read a post from a business that's finding ordinary bank transfers getting more traction from customers than they expected: https://www.revk.uk/2020/06/beyond-credit-cards-is-this-way-...

This is very common in Thailand, in person and online. Shops often have QR codes than encode their bank details. Also, cash on delivery, and also you can finish some online purchases by taking money into 7-Eleven.

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

#165

Post by paranoidrobot »

Reason077 wrote: post #52
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.

In the EU, interchange fees are capped at 0.2% of transaction value for debit cards, and 0.3% for credit cards. This has indeed meant that rewards and cashback credit cards have largely disappeared (with the exception of Amex, which operates outside the interchange system?). Rewards/cashback cards that do still exist are typically tied to specific retailers, with whom the issuing bank has cut their own deals.

> with the exception of Amex, which operates outside the interchange system?

Right, but try using Amex in Europe.

Outside of major international hotel chains, or where you can do your purchase online through Paypal, you may as well not bother asking if they accept it.

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

#166

Post by tomklein »

acomjean wrote: post #113
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…

>Get 2% if you use cash instead of VISA" Some gas stations where I live have a "credit" price and a lower "cash" price.

In Germany lots of places just don’t accept any cards besides Visa and MasterCard just because of the seller fees.

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

#167

Post by an_opabinia »

jedberg wrote: post #40
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.

Sure, but the base rate comes from MC/Visa. Precessing credit cards is a low margin business. It's basically a race to see who can charge as close to the MC/Visa rates as possible.

This isn't really about Visa-MasterCard, it's about a darling like Stripe charging 2.95% because 3% is customary.

People will freak about their customary rent/take being threatened. They gotta come out of the woodwork and justify the charge... somehow. A HN proxy battle!

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

#168

Post by xnyan »

simias wrote: post #115
arachnid92 wrote: post #83

Earlier quoted context omitted.

I just want to present a counterpoint to your claim that in the EU, CCs matter less: there are countries in the EU like Sweden where cash is virtually non-existent. Basically everything is card-based here, I've even seen panhandlers who accept electronic payments in Stockholm.

Paying by card is common, paying using a Credit Card not necessarily. I'm French and I'm semi-ashamed to admit that when at a store abroad the clerk asked me "debit or credit?" for payment I had to ask him to explain to me what this quaint exotic incantation meant. When I finally understood how that system worked I also finally understood this weird trope in American movies where a character has a half a dozen credit…

Counterpoint, my partner got very sick and I burned my savings then borrowed money from every source I could, including credit cards. I knew I was accepting awful terms, but they gave me money and that’s what I needed at that moment and it was the only way I could get it.

I’m not asking for pity, I knew what I agreed to and I’ll pay it but sometimes high interest revolving credit (credit cards ) only choice you have.

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

#169

Post by wtn »

acomjean wrote: post #113
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…

>Get 2% if you use cash instead of VISA" Some gas stations where I live have a "credit" price and a lower "cash" price.

That's because US federal law no longer allows credit card companies to forbid cash discounts.

The above poster was incorrect.

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

#170

Post by ss7pro »

wil421 wrote: post #153
simias wrote: post #115

Earlier quoted context omitted.

Paying by card is common, paying using a Credit Card not necessarily. I'm French and I'm semi-ashamed to admit that when at a store abroad the clerk asked me "debit or credit?" for payment I had to ask him to explain to me what this quaint exotic incantation meant. When I finally understood how that system worked I also finally understood this weird trope in American movies where a character has a half a dozen credit…

Debit card (bank card) transactions in the US require a PIN. Credit cards require a signature but most gas stations require a zip code. It would be nice if the US had PINs like Europe does for credit cards. I make around $1500-$2000 a year in cash back from my credit cards and $195 in fees. 6% back for groceries, 3% for gas, 3% on online shopping, and 3% for restaurants. All my household utilities and bills are run t…

I have six CC , my total AF for them is $2500. Every year I got at least $6500 back from using those cards. Not to mention travel insurance, car rental insurance and purchase insurance which comes with those cards and it's worth at least $600 a year.
Post reply on HN