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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

#371

Post by Symbiote »

daveoc64 wrote: post #212
jpkoning wrote: post #173

Earlier quoted context omitted.

This is good news on the competition front. The traditional problem with bank-to-bank transfers in a retail, or point-of-sale, setting has been speed. Cheque was about the fastest that could be mustered. But with developments like UK Faster Payments (which is mentioned in your link) bank-to-bank transfers are getting faster, in some cases instant. And so usability at the point-of-sale is now on par with cards. In Hol…

I can't really see bank transfers taking of at the point of sale in the UK. Making a payment with most banking apps is very clunky - especially for the first time with 2FA. As a consumer, a credit or debit card gives me a lot of protection. I wouldn't give that up for anything (oh, and the cashback I get too).

It works like this in Denmark [1].

You open the MobilePay app, and touch the NFC thing. The amount and payee is shown, and you swipe to confirm the payment. The retailer's POS gets a message.

In a small shop without a fancy POS system, they just print a paper QR code. You can scan that, but you need to type the amount yourself.

[1] https://images.squarespace-cdn.com/content/5564e82de4b0edcad...

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

#372

Post by DevKoala »

dingaling wrote: post #337
DevKoala wrote: post #268

Earlier quoted context omitted.

It was a painful year that taught me a lesson. Looking at how fiscally responsible I have become, I really have no complains.

It's not financial responsibility or learning lessons, it's the fact that you consider earning cashback to be a reward for the ordeal you endured. By participating in the cashback scheme you're putting more people through that ordeal by means of higher fees. The only way to win is not to play.

I don't consider earning cash back to be a reward, but I see the credit card as a product that lends money based on a risk evaluation.

At that moment in my life, the risk on lending me money was high and therefore the product I could access was limited. There was little incentive for the bank to risk lending me money, so I needed to purchase my way into rebuilding my credit. As the risk in lending me money decreased, banks became incentivized to offer me lines of credit so the cash backs kicked in.

Rebuilding my credit has allowed me to access lower rates on my mortgage , investments loans and other financial tools that have greatly contributed to my quality of life. I would consider that to be the reward.

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

#373

Post by Cu3PO42 »

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.

AMEX is a three-party system, whereas Visa/MC are a four-party system. The difference is that AMEX themselves issue their cards, whereas for Visa/MC it's the customer's bank (on license by Visa/MC). Since the customer's bank sets the interchange fee, a merchant can't possibly know what it's going to be before the transaction.

With AMEX the merchant does know the exact fee structure and can therefore decide to accept or not to accept AMEX ahead of time. That's essentially the argument why the fees for AMEX were not capped.

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

#374

Post by imtringued »

Polylactic_acid wrote: post #358
m12k wrote: post #350

The experience of receiving credit card payments for a SaaS subscription sucks badly, even if you disregard the inflated payment processing fee. Banks can allow the charge to happen the first five months, then on the sixth charge, randomly turn on a penny and reject the charge with a completely opaque do_not_honor code, which probably translates to 'our fraud detection algorithm felt extra paranoid today'. There's a…

The whole system seems to be designed in such a bad way and relies on a bunch of heuristics and insurance to make up for easy fraud. Why is it that to pay for something you give the seller the keys to your account and they go in and withdraw the money they want instead of the seller sending you a request and you accepting to send the requested money.. Another plus side of your suggestion is it now becomes trivial to…

I'm still wondering why there is no electronic SEPA mandate. When you want to authorize e.g. for your landlord to be allowed to withdraw rent payments from your account the landlord has to physically mail you a SEPA mandate which you have to sign and mail to your bank.

This may sound like a slightly obsolete but otherwise well thought out system until you notice that revoking the SEPA mandate requires you to contact the vendor first which is kind of silly.

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

#375

Post by philwelch »

perl4ever wrote: post #283
gruez wrote: post #157

Earlier quoted context omitted.

>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.

It's a way around the truth in lending laws,* to make interest rates appear lower than they are. Instead of 2% cash back for some, they could just add 20 percentage points or so to the interest rates of everyone else. If you think this is unfair, you're really just saying that interest rates are applied unfairly. But it doesn't sound like that's your actual thought process. Is everyone who pays higher rates subsidizi…

That’s not really how credit cards work though. You only ever pay credit card interest if you carry a balance from month to month. Cash back doesn’t just reduce your effective interest rate; your effective interest rate can already be zero simply by virtue of paying the full balance due every month. And the credit system does literally nothing to discourage this behavior; in fact, the credit scoring algorithms incentivize it.

The money for cash back comes from transaction fees. It would have to. People go out of their way to find ways of maximizing their return from these kinds of systems so any cash back scheme that could be too easily gamed would fall prey to these people. That actually happened once, albeit to a “merchant”. The US mint used to let you buy $1 coins, online, with a credit card, for $1 each and free shipping. You could literally buy your entire credit limit’s worth of $1 coins, deposit those same exact coins at your local bank branch to pay your credit card bill before it came due, and straight up profit from the cash back.

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

#376

Post by avianlyric »

m12k wrote: post #350

The experience of receiving credit card payments for a SaaS subscription sucks badly, even if you disregard the inflated payment processing fee. Banks can allow the charge to happen the first five months, then on the sixth charge, randomly turn on a penny and reject the charge with a completely opaque do_not_honor code, which probably translates to 'our fraud detection algorithm felt extra paranoid today'. There's a…

Interesting this systems already exists. For Mastercard it’s called MDES for Merchants, or to give it its full name Mastercard Digital Enablement Service for Merchants.

It’s an extension of the technology that powers Apple Pay and Google Pay, and basically allows merchants to get a virtual card issued to them.

In the EU that would require 2FA to happen, along with describing to the customer what the billing schedule is (required for SCA but being implemented slowly).

The end result is the merchant gets a non-expiring virtual card to bill the customer, and the customer get the ability to disable certain merchants by asking their bank to destroy the card linked to a specific merchant.

Unfortunately all of this stuff is very new, and there are a bunch of issues that will prevent merchants from using the tech. But it is happening slowly.

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

#377

Post by mediascreen »

paranoidrobot wrote: post #165
Reason077 wrote: post #52

Earlier quoted context omitted.

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.

I think it differs a great deal between countries in the EU. I'm Swedish and I have an Amex card and most of my friends and colleagues use Amex as well. I use it for about 85% of my spending each month. The only places in Stockholm that don't accept it are smaller coffee shops, restaurants that don't get that many tourists and mom and pop stores.

You could probably get by here with just an Amex card and cash, but I keep a backup card for the places that don't accept Amex.

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

#378

Post by bluesign »

_8j50 wrote: post #21

Would be happy to buy a usable cryptocoin card. I was thinking about interest-free crypto-loans where the debtor would speculate on the value of the currency at the time it will paid off (like options trading). If you loan 100btc you would loan with the speculation that for example it would be 10% more valuable in a year. If in a year your speculation is correct, you break even, if the price is 10% lower, the debtee…

You have 1 btc lets say 10k usd.

So in one year i have to pay you 11k.

It is basically 10% interest.

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

#379

Post by consp »

ipsum2 wrote: post #368
dx034 wrote: post #361

Earlier quoted context omitted.

Also, with interchange fees at 0.3% and total card fees <1% for many shops, it's actually cheaper for sellers to accept cards than cash.

How do you figure? Is it from counterfeit money, or cost to transport the cash?

Bringing cash to a bank either via deposit boxes or by collection is not free and coinage is even more expensive than paper. At least here in Europe

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

#380

Post by eloisant »

ipsum2 wrote: post #368
dx034 wrote: post #361

Earlier quoted context omitted.

Also, with interchange fees at 0.3% and total card fees <1% for many shops, it's actually cheaper for sellers to accept cards than cash.

How do you figure? Is it from counterfeit money, or cost to transport the cash?

There is risk of theft too, not just robbery but from employees.

Usually the main reason some shops prefer cash is because they can put the cash directly in their pocket and do tax fraud on a percentage of their revenue.

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