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Tech companies are clamoring to give you credit cards

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Re: Tech companies are clamoring to give you credit cards

#41

Post by mgkimsal »

cheonic729 wrote: post #9
est31 wrote: post #7

The entire idea behind credit cards is to force processing fees upon store owners. As a store owner you are required to pay up to 3.5% of your revenue to the processing company (the percentage can be even higher than that if you sell stuff for small amounts, like just a dollar). With cash you can choose your bank and there is more of a free market, while with credit cards you can't get around not accepting certain br…

> The entire idea behind credit cards is to force processing fees upon store owners. No. As a consumer, I enjoy immense value by carrying around zero cash. In fact, I don't even carry around physical cards (thank you Apple/Google Pay).

that does not contradict or invalidate that the idea behind them was/is to force processing fees on merchants. whatever benefits you may or may not enjoy are unrelated to the purpose behind cards being offered.

Re: Tech companies are clamoring to give you credit cards

#42

Post by mgkimsal »

snarf21 wrote: post #17
est31 wrote: post #7

The entire idea behind credit cards is to force processing fees upon store owners. As a store owner you are required to pay up to 3.5% of your revenue to the processing company (the percentage can be even higher than that if you sell stuff for small amounts, like just a dollar). With cash you can choose your bank and there is more of a free market, while with credit cards you can't get around not accepting certain br…

Cash businesses are also some of the ones the most prone to employee theft, especially bars. Also, the 3.5% is just passed on to the consumer is happy to pay for the convenience it brings.

> the consumer is happy to pay

Happy to pay? Or ignorant of the cost? Or ... not offered any discount for cash? I'm not particularly "happy" to pay these fees, but there's not much way around them. They get baked in to prices, and I'm not offered a way to opt out.

Re: Tech companies are clamoring to give you credit cards

#43

Post by setr »

jjoonathan wrote: post #40
throwaheyy wrote: post #31

Earlier quoted context omitted.

No. The entire idea behind credit cards is to reduce friction in commerce resulting from handling cash. This attracts more customers to businesses through increased convenience. Taking cards is voluntary, there's no "forcing processing fees" involved. Plenty of businesses opt not to take credit cards. In fact, interchange fees (which in the US now top out around 2.7%, not 3.5%) are at an all-time low because of techn…

> Taking cards is voluntary, there's no "forcing processing fees" involved. Lol, sure. That's why they make stores promise to never, ever, under any circumstances make interchange fees visible to customers. Hiding in the shadows is not the sign of voluntary mutual-benefit value creation, it's the sign of a good hustle that someone is hoping to milk just a little bit more before the Sauron's Eye of public attention tu…

I usually see it, but inverted: "we offer a 4% discount for cash payments" signs

But usually only in small individual shops

Re: Tech companies are clamoring to give you credit cards

#44

Post by AnssiH »

lollolintercha wrote: post #29
toomuchtodo wrote: post #10

Earlier quoted context omitted.

If the US regulated interchange fees like Europe did (In the EU, interchange fees are capped to 0.3% of the transaction for credit cards and to 0.2% for debit cards, no cap for corporate cards), everyone would still get the benefit of cashless transactions without the processing rake credit card processors and related entities take.

Ha. Other fees nearly always take this above 1%, often closer to 5% and as far as 20% only sub dollar transactions. Other fees are your scheme fees of which there are many, avs fees, and your acquirer fee (the people who take the chargeback risk - e.g. adyen 0.65%)

That may be true for ecommerce.

But for physical card-present EMV transactions the rates are typically under 1% in Finland, see comparison: http://www.maksupaatevertailu.fi/ (in Finnish)

Nets is the most common physical merchant services provider here, I believe, which has 0.41% for Visa/MC debit and 0.91% for Visa/MC credit (though there are surcharges for foreign cards etc.).

Re: Tech companies are clamoring to give you credit cards

#45

Post by jjoonathan »

setr wrote: post #43
jjoonathan wrote: post #40

Earlier quoted context omitted.

> Taking cards is voluntary, there's no "forcing processing fees" involved. Lol, sure. That's why they make stores promise to never, ever, under any circumstances make interchange fees visible to customers. Hiding in the shadows is not the sign of voluntary mutual-benefit value creation, it's the sign of a good hustle that someone is hoping to milk just a little bit more before the Sauron's Eye of public attention tu…

I usually see it, but inverted: "we offer a 4% discount for cash payments" signs But usually only in small individual shops

If that's allowed under the credit card processing merchant agreements it's a new development.

If I had to guess, it's still forbidden, but small shops don't know/care until the CC company actually asks them to stop.

If people could get a 5% discount everywhere with their debit card, the gig would be up, and the CC companies know it.

Re: Tech companies are clamoring to give you credit cards

#46

Post by 908B64B197 »

1MachineElf wrote: post #34
908B64B197 wrote: post #3

Earlier quoted context omitted.

> a few financial companies (Capital One) are now seeing themselves and identifying as tech companies. Is it branding or an actual shift? I've seen many companies pivot to being "tech companies" but still didn't have incentives in place to attract real talent, and more crucially that still treated software and tech as a cost center. But hey they had bean bags!

Before their infamous AWS breach, a former coworker of mine tried to get me hired there under a fancy cyber security operations title. He gave me a tour of the new(ish) building around Tysons Corner, VA. It is a very modern building, with a lot of charging stations and Tesla model S EVs in the parking garage. Public events happen there, they have two cafeterias, and probably a whole bunch of networks supporting all o…

> So I went through the hiring process. There's an online proprietary aptitude test that's required of all candidates, and it's apparently such a big deal, that you can only take it once per 6 months.

Is it at least a technical test?

"Aptitudes and psychometric tests" are, to me, a red flag at tech companies, that it's HR and not engineering that's in charge of hiring.

Re: Tech companies are clamoring to give you credit cards

#47

Post by throwaway_pdp09 »

asutekku wrote: post #39
graham_paul wrote: post #33

Earlier quoted context omitted.

You are paying a price for that. The second someone steals your phone, you lose it, drop in into water or your battery runs off, you are temporarily poor and if you might find yourself in trouble if you can't get somewhere where you can charge your phone

The second someone steals my cash i don’t have it anymore. If someone steals my phone, it is locked and the money attributed to it are safe. Sure, i may have lost my phone but my money is safe.

Of interest, and I really don't know as I've never had a smartphone, if your phone is stolen, what stops it being used to pay for something? The point of the convenience was - I thought - that you just swipe. Couldn't a thief?

Also how do you do anything if your phone is gone - travel, call, let the bank know, buy a new phone, let your partner know you're in trouble, anything?

Also how much is you phone worth? A quick look suggests ~£1000 for an iphone 11, although I guess that's needlessly high, but you're carrying a large cash equivalent, highly attractive? I've never had £500 or the equivalent in my pocket, ever (max ~£350 for 1/2 hour IIRC).

And cash doesn't break if you sit on it. I'm not entirely convinced of your case quite yet.

Re: Tech companies are clamoring to give you credit cards

#48

Post by throwaway_pdp09 »

the_jeremy wrote: post #36
throwaway_pdp09 wrote: post #25

Earlier quoted context omitted.

What is this 'immense value'?

less hassle, enhanced security. I can spend hundreds of dollars without having to carry that much cash on me, or having to go to an ATM ever. It's more convenient and more secure, which is almost never true today.

Is cash that hard?

Re: Tech companies are clamoring to give you credit cards

#49

Post by fredophile »

dylan604 wrote: post #11
est31 wrote: post #7

The entire idea behind credit cards is to force processing fees upon store owners. As a store owner you are required to pay up to 3.5% of your revenue to the processing company (the percentage can be even higher than that if you sell stuff for small amounts, like just a dollar). With cash you can choose your bank and there is more of a free market, while with credit cards you can't get around not accepting certain br…

And here I thought the entire idea behind credit cards was to make up to 22% interest from the user. The 3.5% per transaction from the retailers just seems like bonus. If not even considered a double dipping since most retailers will take the 3.5% into consideration of their pricing.

This depends on the card. The cards people associated most with Amex (platinum, gold, etc) are charge cards and you're expected to pay them in full every month instead of carrying a balance. That's part of why Amex historically had higher fees for retailers. Those fees were their only source of income.

I'm sure most banks have good enough financial modelling that they can tweak their credit card approvals to get whatever balance between retail fees, annual fees, and interest they want for that card.

Re: Tech companies are clamoring to give you credit cards

#50

Post by detaro »

throwaway_pdp09 wrote: post #47
asutekku wrote: post #39

Earlier quoted context omitted.

The second someone steals my cash i don’t have it anymore. If someone steals my phone, it is locked and the money attributed to it are safe. Sure, i may have lost my phone but my money is safe.

Of interest, and I really don't know as I've never had a smartphone, if your phone is stolen, what stops it being used to pay for something? The point of the convenience was - I thought - that you just swipe. Couldn't a thief? Also how do you do anything if your phone is gone - travel, call, let the bank know, buy a new phone, let your partner know you're in trouble, anything? Also how much is you phone worth? A quic…

You need to unlock the phone to pay with it.
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