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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

#181

Post by partiallypro »

I feel like card competition is actually pretty steep. MasterCard and Visa may have the majority of the market, but there are still Discover and AmEx. I have been using things like NerdWallet to figure out what is the best card to go with, it is usually a healthy balance. I think the main thing is that most Debit cards are Visa or MasterCard...and you are locked in by your bank. Where as credit & charge cards are a free for all.

When it comes to advertising online though, you have only 2 choices...Google or Facebook. As a business I can't not go with those two or I'll lose immense business. I can go with a Visa, Mastercard, Discover, Amex...and it really has no effect on me outside of the benefits the card gives me. The fees charged to the banks, etc are essentially the same. So it's really no comparison as to which is worse for the market itself.

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

#182

Post by adrr »

fragmede wrote: post #156
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…

The outside disrupter was supposed to be Apple Pay, but that didn't work and now Apple just issues credit cards (through Goldman Sachs). Visa/MC has such a monopoly stranglehold that getting kicked off their Network is tantamount to going broke. There are esoteric options aka Bitcoin, money order, check, but if being able to accept credit cards makes this drastically more difficult. (Ask the legal cannabis industry h…

Apple Pay charges a fee as well. It also isn’t a payment system but a tokenization system similar to the chip on credit cards. Zelle was created by the big bank which is why you don’t see it at the small local banks. None of the competitor banks(fintech) have zelle support and I guess this isn’t their choice. They have to move money by ach with is much slower.

Any payment/money movement system needs a license and you’re still bound by federal rules on AML and KYC. It makes it hard to support the cannabis industry. AML laws will force you to report large cash movements.

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

#184

Post by teej »

partiallypro wrote: post #181

I feel like card competition is actually pretty steep. MasterCard and Visa may have the majority of the market, but there are still Discover and AmEx. I have been using things like NerdWallet to figure out what is the best card to go with, it is usually a healthy balance. I think the main thing is that most Debit cards are Visa or MasterCard...and you are locked in by your bank. Where as credit & charge cards are a f…

You’re talking about different things. When you shop credit card offers, you are comparing issuers (eg Chase vs Capital One). That’s not the same as the payment processor aka card network (Visa vs MasterCard).

Of course it’s endlessly more complicated then that but it’s important to make the distinction.

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

#185

Post by chongli »

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?

People who pay in cash are subsidizing the store’s costs to handle cash. Paying employees to count the cash (usually after closing), putting it in the safe, distributing the cash to cash registers, refilling when they run out of change, paying for the security service (Brinks etc) to deliver cash to/from the bank, insurance against robbery...

Cash is not free for a store to handle. Stores pay transaction fees on credit cards, sure, but they save on all the costs of cash. A hypothetical store that takes credit cards only would not have any of these costs and their vulnerability to robbery/theft would be limited to merchandise and capital only, saving the cost of insurance against theft of cash. For some types of businesses (services rather than retailers), this makes their office a pretty unattractive target for burglars and eliminates employee theft of cash.

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

#186

Post by argonaut »

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…

I don't get it -- bringing up Amex and Discover is like bringing up Bing and DuckDuckGo when people talk about the Google monopoly.

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

#187

Post by closeparen »

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…

How the customer settles with the card issuer is not really relevant here. Many US card transactions draw from a checking account instead of a line of credit, but from the merchant's perspective it is just like any other Visa or Mastercard.

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

#188

Post by granshaw »

gruez wrote: post #157
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 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. And that's a bad thing, because it's essentially the poor subsidizing the rich. People who aren't able to get credit cards (or the "good" cash back credit cards) tend to be worse off financially than people who do.

This has always struck me as one of the more blatant and out-in-the-open financial inequalities in this country.

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

#189

Post by rtpg »

PeterisP wrote: post #67
xfour wrote: post #3

While I agree with the sentiment, things have certainly opened up lately quite a bit with the mainstream-ization of the crypto currencies. One could conceivably avoid Visa / MC in a way that just wouldn't have been possible before. Visa / MC remind me a bit of Ticketmaster in that they've got parties on both sides defending them because of kickbacks. You charge the merchant the "interchange fee" plus some amount and…

I'm not seeing a "mainstream-ization of the crypto currencies". A few years ago, quite a few local businesses were experimenting with accepting cryptocurrency payments, and I could buy all kinds of stuff and services using bitcoin. I could order a pizza with bitcoin, I could buy electronics at a major retailer, I could buy plane tickets, I could pay for lunch in a local cafe. That's not the case any more, by now all…

Crpyto isn't mainstreaming but you are having a mainstream-ization of non-CC digital payments.

Venmo is the thing in the US, but China has Alipay/Wepay, SE asia has various digital payment apps, Japan has had a huge "cashless" push in the past 12 months....

If I were running a retail shop in the US I definitely would accept payment by Venmo if I could.

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