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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

#431

Post by netcan »

jedberg wrote: post #30
tiffanyh wrote: post #20

I am reading so much incorrect information in this thread it’s maddening. The card network (Visa, Mastercard, etc) do NOT make money on Interchange. 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. Below is a decent primer. https://www.investopedia.com/articles/markets/032615/how-mas...

I mean, technically no they don't. But that's just being pedantic. They charge the bank based on gross dollar volume, and the bank gets the money to pay for that from... interchange fees. The more volume the bank does, the more they pay and the more they get from interchange fees. Interchange fee pricing is set based on how much mastercard charges the banks, so while technically true, the interchange fees are basical…

I agree with the OP that we need to be informed in order to have the conversation.

But..... You have the main point here. The whole premise of monopolies is that monopolies dominate bottlenecks, and use them to generate outsize revenue and protection from competition.

Facebook doesn't make money directly from whatsapp. It can be used to generate data for FB's main advertising business. Most importantly, it helps maintain facebook's dominant position in social media. That position is revenue generating.

I agree that understanding the mechanics are important. But, we can't keep treating monopolies as innocent of monopolistic practice until proven guilty. The reason we have antitrust in the first place is that monopoly positions lead to monopolistic practices. We need to assume monopolistic practices exist in the case of a monopoly. When one monopolistic practice (eg amazon marketplace or adwords) has been proven in court, this should be treated as proof of monopoly, not a standalone violation.

Same with the CCs.

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

#433

Post by hef19898 »

jedberg wrote: post #30
tiffanyh wrote: post #20

I am reading so much incorrect information in this thread it’s maddening. The card network (Visa, Mastercard, etc) do NOT make money on Interchange. 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. Below is a decent primer. https://www.investopedia.com/articles/markets/032615/how-mas...

I mean, technically no they don't. But that's just being pedantic. They charge the bank based on gross dollar volume, and the bank gets the money to pay for that from... interchange fees. The more volume the bank does, the more they pay and the more they get from interchange fees. Interchange fee pricing is set based on how much mastercard charges the banks, so while technically true, the interchange fees are basical…

And these technicalities matter a lot. They make, in some cases, the difference between legal an illegal. Not understanding them leads to wrong conclusions.

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

#434

Post by giancarlostoro »

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…

Sure Amex and Discover provide alternatives but if you want to start a credit card company you dont get to tag team with those two at all as far as I can tell. Which I think is a bigger problem. If you as a bank want to start your own credit card you have to go for the most supported provider to even attract potential credit card holders.

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

#435

Post by lmz »

hadrien01 wrote: post #428
namdnay wrote: post #387

Earlier quoted context omitted.

It is a common issue for French people renting cars outside of France - search on Google, there are hundreds of angry people who ended up with no car because agencies in other countries refuse debit cards (debit immediat)

Why would renting agencies refuse debit cards? You get your money, just like credit cards...

My guess would be single message (debit) vs dual message systems. They probably want to hold / authorize a large amount first as insurance.

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

#436

Post by tosers4 »

navaati wrote: post #346
jedmeyers wrote: post #271

Earlier quoted context omitted.

> very impersonal, only-the-numbers-and-ROI matters. What would be a more personal approach when figuring out whether or not to loan the money to someone?

Deciding to lend to someone because you know them (they are "part of the community"), or they are a friend, or they are family. Of course it can be seen as more "humane" but it can also be seen as nepotism and/or a system excluding newcommers/strangers.

The condition is still the same. "Will he/she be able to pay me back/ return the favor"

And that condition will always benefit those who can return back. It's not about being newcomer or stranger, it's about being able to identify if it's a loan you can do.

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

#437

Post by jpkoning »

jiggunjer wrote: post #304
daveoc64 wrote: post #212

Earlier quoted context omitted.

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).

But I thought debit card = bank transfer? There is no protection?

Yes, a debit card is a bank transfer.

In the US, most PIN debit card transfers occur via either MasterCard's Maestro or Visa's Interlink debit networks. Signature debit payments go through MasterCard/Visa's credit card networks. So you've still got the duopoly problem.

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

#438

Post by ivan_gammel »

NicoJuicy wrote: post #416
ivan_gammel wrote: post #327

Earlier quoted context omitted.

Germany is cash-based because of consumer behavior, not because costs are somehow lower. With corona, e-Commerce and services like SumUp more widespread Germany will inevitably catch up with other countries.

Well, I thought so too in the start. But I asked someone in a popular local store ( Belgium) and consumer behaviour hasn't changed.

How is this relevant to Germany?

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

#439

Post by paranoidrobot »

mediascreen wrote: post #377
paranoidrobot wrote: post #165

Earlier quoted context omitted.

> 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 k…

Odd. I'd given up trying to use it by the time I got to Sweden.

Your neighbours (Norway and Denmark) were unwilling to accept it. I forget which supermarkets I tried it in in both of those countries, but three large chains all had their card terminals reject it and the staff looked at it like I'd tried to use a hotel keycard or something.

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

#440

Post by tosers4 »

dathinab wrote: post #47
tiffanyh wrote: post #20

I am reading so much incorrect information in this thread it’s maddening. The card network (Visa, Mastercard, etc) do NOT make money on Interchange. 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. Below is a decent primer. https://www.investopedia.com/articles/markets/032615/how-mas...

True, also in many EU countries credit cards do matter much less. For example in Germany card payment is normally done with EC cards (girocard,vpay,etc), including NFC based payment. For long term recurring payments SEPA is common, for one time payments simple bank transactions over online banking. This includes online payment for services like Amazon. Oh an not to large local payments (e.g. restaurant) are also very…

Here in Portugal its "Multibanco" network that is used. That's why "MB way" got that "send money thorugh phone numbers" in 2014, and worked with every bank without commissions.

Very few people even have credit cards.

Places like restaurants and groceries still usual demand something like "minimum 5/10€ to use card", but those signs are disappearing.

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