71–80 of 84 posts
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If card processors cared about fraud they would have rolled out chip & pin 20 years ago. They don't and the fees aren't that high because of it. The fees are so high for the profit and the stupid minigames that trick americans into having a wallet full of plastic cards for "savings" and "cashback".
Is chip & PIN a worthwhile investment into security, considering the growing number of online transactions?
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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…
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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…
If it was about reducing friction, why would credit card companies make it mostly against the terms of their contracts to charge different rates for credit card using customers?
Card processing companies provide a convenience, for which they charge a fee. If it was such a big deal, businesses would not sign on, and many don’t because it doesn’t work for them.
Enough businesses decide that the extra set of customers they can draw by accepting credit cards is worth the 2.5% processing fee, which is why credit cards still exist. It’s not some kind of extortion racket.
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> 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’ll draw an analogy. Most tech firms will make you sign an NDA as a condition of employment. That doesn’t mean that you are forced to work there.
Credit card companies would get bowled over in a second if we didn't let them leverage their size into anticompetitive contract terms, but this is America! We love oligopolies, low-competition markets, anticompetitive behavior, and rent-seeking. Freedom, baby!
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If it was about reducing friction, why would credit card companies make it mostly against the terms of their contracts to charge different rates for credit card using customers?
Who knows, maybe their argument is that works against the image of convenience for customers? You’d have to go ask them, but it might be proprietary information. Card processing companies provide a convenience, for which they charge a fee. If it was such a big deal, businesses would not sign on, and many don’t because it doesn’t work for them. Enough businesses decide that the extra set of customers they can draw by…
And no, 2.5% is not typical. Maybe Walmart gets 2.5%. I've seen between 4% and 15% in those few instances when the man behind the curtain has been distracted and true rates have snuck past his veil of secrecy.
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Can you explain this a bit more? I have no idea what you mean by "credit credit card" vs "debit credit card".
Here is an FBI employee explaining the difference between the two when a breach happens: https://youtu.be/vsMydMDi3rI?t=2737 A more general article: https://www.investopedia.com/articles/personal-finance/05021...
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If it's bayesian-unlikely they want your phone then why should it be any less bayesian-unlikely they want your cash. That's one weird argument. And BTW your phone is usually quite visible, like sticking out if not actually being used. > and max-spend limits Ok, now they've got your expensive phone and can spend up to your limit.
> If it's bayesian-unlikely they want your phone then why should it be any less bayesian-unlikely they want your cash. Because phones these days are mostly bricks when you steal them. Cash still works. > Ok, now they've got your expensive phone and can spend up to your limit. Haha, no, they can't. That's not how any of this works. But listen, it doesn't matter. Carry cash if you want. I won't. And may the chips land…
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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.).
Valid point, I refer to card not present tranx, but are you sure the 0.41% is when via the mc/visa network though (even if we accept an interchange of 0.2x), many of these cards in europe have an alternative national pay network for local cards - you will actually see the choice on some POS screens too. And asia too - TPN dual branded with err can't remember that name of the Chinese pay network that has failed to inf…
The Nets rate for non-Finnish in-EU debit cards is 0.51% and for non-EU debit cards it is 1.71%, and +0.80% for corporate cards (all 2017 rates and for Visa/MC only).
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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…
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…
Not sure why raised public attention would reduce credit card usage. People like the convenience, and I don’t see why they would care that it shaves a few basis points off of merchants’ margins. You’ll notice that in transactions with razor thin margins, credit cards aren’t accepted, restaurants being the major exception.