221–230 of 547 posts
Amex/Discover, plus PayPal and a host of lessor money transfer apps/companies, like Venmo and Zelle.
Venmo is owned by Paypal. Zelle is owned by all of the big banks collectively (Bank of America, Capital One, Wells Fargo et al.). The closest thing to a "small" player is the Cash app, owned by Square. No commentary on the larger picture here or Amex/Discover, just pointing out your other examples don't exactly fit your point fully.
At this point, the innovation stream has just about dried up. We're left with a need for micropayments that don't cost more to process than the value of the transaction, and almost all innovation has taken place to one side of card services.
If we fixed international funds transfer we'd probably get some incremental benefit. KYC is only part of the problem here, I recently did some IBAN transactions to the UK government from Australia and the expectations of fixed-field width (send this 15+ char reference string, but the input side has 12 chars for the reference field) were bizarre.
Huge amount of excess profit in TT.
Cheques? dead except for the USA.
Coins are dying of covid.
Remittence processes and the Islamic banking tradition is waiting to be somewhat unlocked. (trust is not transitive, unless you are a migrant worker from S.E.Asia and you have to get money back to mom and dad efficiently, without having any formal ID in the host country because your boss took your passport)
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Card != CC. The point is that in EU there's less motivation to use credit cards than in USA because the situation is better for payment cards that are not credit cards. If you refer to Sweden, I believe that the split there is that something like 40% of the cards are credit cards, and the majority are not.
Likewise in Australia. The only difficulty I've found using a debit card in recent years is when renting a car: with a debit card, they generally want to put a "hold" on the account for a few hundred dollars. I can't get a credit card anyway since my income isn't high enough, and I wouldn't want one because they charge annual fees in Australia. Banks in Australia run their own payments system, so it's possible to pay…
They generally don't have any kind of linked reward points structure, but that's not a huge loss as most of those got nerfed after the ACCC changes a while back (see elsewhere in these comments).
Amex/Discover, plus PayPal and a host of lessor money transfer apps/companies, like Venmo and Zelle.
Just curious why PayPal or Venmo?
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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…
The place I went to yesterday for lunch did this. This is in Silicon Valley. I believe it was a 3.9% credit card fee.
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> 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.
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. It's very interesting to hear that. When I first started traveling to Europe, having an American Express card (or even better, AmEx travelers checks) was the best way for an American to pay for things. It's even written into some classic books and movies. My how th…
I would guess 90% of Europeans have never even seen one of these cards, unless they work in international hotels or tourist places.
It always fascinated me that the process went to a semi regulated user pays cost recovery competition model, not to a regulated utility model. At this point, the innovation stream has just about dried up. We're left with a need for micropayments that don't cost more to process than the value of the transaction, and almost all innovation has taken place to one side of card services. If we fixed international funds tra…
I disagree completely.
There's no technical or business reason why we couldn't have micropayments tomorrow. It's been tried many times already. The thing about micropayments is nobody actually wants them. Each time you make a payment of any magnitude, your brain has to process a 'purchase' which carries a large mental burden, and eventually you get decision fatigue.
Micropayments are one of those ideas that people think we want, but in practice, nobody does.
As a thought exercise, why do you pay Netflix $13/month and deal with sporadic content disappearances, when you could pay Apple $1.99 for a perpetual license to whatever piece of content you could ever want? Nobody wants to make that purchasing decision each and every time they want something. They'd rather pay for an all you can eat buffet even if it's objectively worse and more expensive over time.
> If we fixed international funds transfer we'd probably get some incremental benefit.
Check out TransferWise! They've done a ton to solve this problem. They even have a currency agnostic bank account with local banking details in 6+ regions and supports 50+ currencies. [1] IMO they've largely solved remittences for the average joe.
If you've got a ton of money to move you can use InteractiveBrokers to exchange currencies at market rates for $20 per million (!!) in commission.
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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…
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…
Imagine if companies charged 2-5% less because they didn't have to fund CC company marketing tools like cashbacks.
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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…
https://en.wikipedia.org/wiki/Expressions_Hair_Design_v._Sch...
Plus, plenty of gas stations show a cash/credit price on their signs.
The merchants are no longer allowed to block this behavior.