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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

#201

Post by reaperducer »

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…

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.

I see this all the time. * At more than one bookstore, the dry cleaner, markets, my current and previous landlord, my accountant, and pretty much every gas station since the 1990's.

* Pre-quarantine. Now I don't see anything.

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

#202

Post by eru »

andrewmutz wrote: post #179
cynix wrote: post #163

Earlier quoted context omitted.

> 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 o…

If the toilets cost 3% of revenue, then yes they should charge separately for using the toilets.

Or rather, they should have the option to do so.

It's a valid business decision to NOT charge extra for the toilets, too. Just like shops usually don't charge people who are a bit slower in the checkout line more for taking up cashier time.

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

#203

Post by [deleted] »

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.

[deleted]

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

#204

Post by eru »

tomklein wrote: post #166
acomjean wrote: post #113

Earlier quoted context omitted.

>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.

And even Visa and MasterCard took a while to get hold. I remember Aldi holding out for ages.

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

#205

Post by lucaspm98 »

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.

Do you think it’s not fair for credit card issuers to try to attract customers that have a higher value to them by offering rewards? Regardless, approvals are mostly based on credit history and not wealth. I was a low income earner for years but paid my bills and credit cards on time so I could get any card I wanted.

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

#206

Post by hn_throwaway_99 »

komali2 wrote: post #111
hn_throwaway_99 wrote: post #89

Earlier quoted context omitted.

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.

Weird, because in three of those states (New York, Texas, and California) I have used cash to get a cash discount in the last year. I imagine it's because of lack of enforcement?

All three of those states I believe had their surcharge bans invalidated by federal courts. Texas' law was declared unconstitutional in summer 2018: https://faq.sll.texas.gov/questions/9631

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

#207

Post by eru »

zaxu wrote: post #69
wolco wrote: post #57

Earlier quoted context omitted.

Like some kind of virtual coin.

The ability to purely make transactions is trivial - you can just use a debit card. The value of credit cards comes from other factors like fraud protection, SCI compliance, actual credit, etc.

Debit cards also charge some fees, but typically lower.

The fraud protection of credit cards mostly comes out of the pockets of the merchant, I think? So the merchant could give people a discount for using means of payment without a chargeback, like cash.

You are right about the actual credit. Though eg in Germany people usually use their overdraft in a same way that American seem to be using their credit cards for short term credit.

(For either convenience is the main selling point. The fees and interest rates for overdraft and credit card debt are usually quite high, I think?)

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

#208

Post by hamandcheese »

closeparen wrote: post #187
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…

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.

The fees for debit transactions are much lower, though.

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

#209

Post by systemvoltage »

komali2 wrote: post #110
systemvoltage wrote: post #100

Earlier quoted context omitted.

Debit cards? The other option is to use a Credit Card but pay off at the end of the month. Why is that so difficult? That’s literally like a Debit card except for the additional “buffer” of safety and security from your bank account.

Every debit card I've had has still involved a credit card company in some way - they've all had the visa logo on them.

That's true, I am not too familiar with the finance system, how come a debit card needs a middle man such as VISA? They help with the transaction between two banks?

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

#210

Post by eru »

FridgeSeal wrote: post #118
vmception wrote: post #38

Earlier quoted context omitted.

> 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. same for so many finance and legal topics you should see the stuff people say in cryptocurrency land, you can even agree with their technology but still be surrounded by the weakest arguments

This is one of the reasons I generally stopped paying attention to the cryptocurrency world. The number of voices with an accurate understanding is far outweighed by the number of people with some kind of personal and ideological axe to grind about (insert some combination of one or more of: government/regulation/inflation/economics/etc) and from my perspective the whole scene got increasingly wild.

George Selgin sometimes writes on cryptocurrencies. He knows what he's doing.

Though I mostly read him for his writings on eg the private mints that solved the British small change shortage during the industrial revolution. https://www.goodreads.com/book/show/3392302-good-money

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