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Forget Google, time to end the Visa-MasterCard duopoly

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471–480 of 547 posts

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

#471
You can’t talk about credit cards in isolation without considering the rest of the consumer finance sector in the US.

A big part of the reasons credit cards rose to such prominence is that the banking and payment rails are so incredibly stupidly designed. The check system and ACH which is the highest volume way that money is sent between people with different banks requires you to give out the secret key every time you make a payment. Plus it takes at least 1-2 days to clear which makes fraud more difficult to deal with.

Interestingly the credit card system also suffers from the first part, your number is printed right there on your card. But they’ve managed to find and/or strong arm ways to reduce fraud on their network, and as a consumer I’m not liable for paying it which is a huge benefit.

The author really lost me at the end though, I don’t see how regulation magically solves everything and they didn’t explain it at all. There is already a ton of regulation in the payment industry. And this comically flimsy underlying system could easily be improved by existing regulators, how about starting with small steps and seeing how that goes? Instead of advocating for throwing out the entire payment system all at once under the very flimsy assumption that the government will do it better.

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

#472
post #168

Earlier quoted context omitted.

Counterpoint, my partner got very sick and I burned my savings then borrowed money from every source I could, including credit cards. I knew I was accepting awful terms, but they gave me money and that’s what I needed at that moment and it was the only way I could get it. I’m not asking for pity, I knew what I agreed to and I’ll pay it but sometimes high interest revolving credit (credit cards ) only choice you have.

As long as it's not a pay day loan everything is fine. If you need liquidity then credit cards are a perfectly sane option. What I never understood though is why you would use a credit card when you don't need to borrow money, which is how most people use them.

I get like a $1000 a year in cash back using credit cards and they all charge no annual fees and I pay everything off in full automatically so I never pay any interest. Add in the consumer protection and the fact that it builds your credit giving you better mortgage/auto loan interest rates, why on earth wouldn't I use credit cards?

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

#473

You can’t talk about credit cards in isolation without considering the rest of the consumer finance sector in the US. A big part of the reasons credit cards rose to such prominence is that the banking and payment rails are so incredibly stupidly designed. The check system and ACH which is the highest volume way that money is sent between people with different banks requires you to give out the secret key every time y…

"not liable for paying it," but you're still paying it at the end of the day via fees and increased merchant prices

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

#476

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.

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…

Sounds like a Pyramid scam

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

#477

Earlier quoted context omitted.

If the merchant doesn't offer the same cash discount for debit cards, then it's tax evasion. Debit card fees are a few cents, and the only reason to offer a big discount for cash, but not debit cards, is to not have the transaction on paper and hence evade taxes.

How could I know are my card credit or debit from system's point of view? I have two cards in my bank, both are exactly same MC cards, embossed, and all (not some Maestro variation). One card is linked with my current account — I have real money at this account, my employer pays my salary by transfer to this account and such. I can not pay if thus account is depleted. Second card is linked with credit account, where…

Based on your description, you have one debit card and one credit card.

If it says debit on the front of the card, it is debit.

I’ve never seen this work in person, but some people claim their debit card worked as a credit card and whatnot. Even if that is true, all merchant systems I’ve worked with allow the merchant/cardholder to select debit or restrict transactions to only debit.

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

#478
The author clearly has little knowledge on the subject of payments. He's likely a consumer.

Getting this "duopoly" right is very hard. Payments has a number of actors, and the label is there to ensure fair play between acquirer and card issuer.

While mastercard and visa controls the market, it's not like there isn't competition: Amex, discovery, etc., are all labels that compete with the so-called duopoly.

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

#479

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

I wonder if this could be done intentionally. It's cheaper to make a view popular with a niche, disliked group than to make the opposite view popular with a large voting bloc

I wouldn't say intentionally, there is solidarity around frustration with domestic and global banking systems, but they've just evolved from a limited view within the community.

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

#480
post #263

Earlier quoted context omitted.

0.75 per transaction locks out the small banks. It would be the most expensive way to transfer money.

Uhh my bank’s $30 to wire fee would beg to differ. Literally any fee less than that for a same-day transfer is worth it.

That’s what the banks pay to use zelle.

The $30 wire fee is what a bank charges you to make money and dependent on the bank. Underlying systems near free to use like ach for domestic wires.

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