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Can the Visa-Mastercard duopoly be broken?

economist.com

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Re: Can the Visa-Mastercard duopoly be broken?

#191

Post by atombender »

philip1209 wrote: post #49

Fraud protection of credit cards is the root of modern e-commerce. In some ways, Visa and Mastercard are the privatized court systems of the internet. If I end up on a random, self-hosted ecommerce site and decide to make a purchase - what guarantee do I have that the item will show up or be as-described? If I bought something through a bank transfer, reversing that purchase would be incredibly difficult. And, suing…

...In the US.

Outside the US, credit cards are much less common outside the US. The alternative to credit cards isn't CoD, it's debit cards, which are connected directly to a bank account. Merchants love debit cards because they have near-zero transaction fees.

You don't need credit card for chargebacks, just strong consumer protection laws that permit the bank to claw the money back from the merchant.

As for fraud, I don't have any data, and I'm sure there's plenty, but we have had chip-and-PIN in Europe for decades, and for more than a decade cards have been protected with 3D Secure and similar types of mandatory 2FA, so having the card number is not enough to complete a transaction.

People seem more wary of accruing debt in Europe; it's easy to lose control over your personal finances with a credit card. But we have middlemen like Klarna now that offer credit-card-like payment deferral. Klarna appears as just another payment processor, but takes on all the risk, similar to a credit card company.

The only thing I miss from US credit cards are cash back rewards.

Re: Can the Visa-Mastercard duopoly be broken?

#192

Post by vetinari »

Jensson wrote: post #171
julienb_sea wrote: post #136

Earlier quoted context omitted.

The benefit of credit cards is no one can literally drain your bank account via fraudulent access to a payment card directly tied to your bank (i.e. debit card in US nomenclature). This is a clear benefit regardless of location. Courts are slow and not scalable, and you don't want to be in a scenario where your bank has been drained right before you need to make important payments.

3% of your credit card spend is a steep cost to pay for that security though, they can't clean out all your money if you don't tie all of it to the debit card, just put a months worth there at a time and you are better off with debit unless you get your debit card stolen every year or so. It isn't more work than credit either, instead of paying it off every month you fill it up every month. And for fraud protection,…

> they can't clean out all your money if you don't tie all of it to the debit card, just put a months worth there at a time and you are better off with debit unless you get your debit card stolen every year or so.

You can set up daily/weekly/monthly limits for debit cards, and separate ones for online purchases, physical terminals or ATMs, if you want.

Re: Can the Visa-Mastercard duopoly be broken?

#193

Post by lotsofpulp »

Teever wrote: post #186
lotsofpulp wrote: post #165

Earlier quoted context omitted.

> Instant, cost-free transfers between any two accounts, completed faster than you can lift your finger off your smartphone. This is available to most people in the US via Zelle. I have been using it for nearly 10 years I think. https://www.zellepay.com/get-started Ideally, the federal government would have already made it a utility available to all, but for now the functionality is there for those who can get a bank…

Who is Zelle and what do they do with the information that they harvest from this service that they offer?

https://en.wikipedia.org/wiki/Zelle_(payment_service)

> Zelle (/zɛl/) is a United States–based digital payments network owned by Early Warning Services, LLC, a private financial services company owned by the banks Bank of America, Truist, Capital One, JPMorgan Chase, PNC Bank, U.S. Bank, and Wells Fargo.[1][2][3][4]

Those are all the biggest banks, so they probably have all the transaction information anyway.

Re: Can the Visa-Mastercard duopoly be broken?

#194

Post by tossl568 »

odrekf wrote: post #179
tossl568 wrote: post #124

Earlier quoted context omitted.

Every lightning channel update is a valid Bitcoin transaction that can be broadcast at any time by either party for final settlement. Lightning is absolutely Bitcoin. You can use the lightning network as very cheap fiat rails if you don't want to deal with Bitcoin or it's volatility. Look at LN/Taro.

>Lightning is absolutely Bitcoin A separate network is not Bitcoin. And Bitcoin doesn't require intermediaries. The only network that fits Bitcoin's definition is BCH.

A layer on top of Bitcoin, which uses Bitcoin transactions that can be broadcast and finally settled at any time is definitely Bitcoin. You can say it fits your subjective definition of Bitcoin until you're blue in the face, nobody uses BCH except people who are scamming or have fell for the scam.

Re: Can the Visa-Mastercard duopoly be broken?

#195

Post by Teever »

julienb_sea wrote: post #136
cycomanic wrote: post #103

Earlier quoted context omitted.

As your post illustrates credit cards are really a solution developped for the deficiencies in the US banking system which have been exported to the rest of the world due to the dominance of the US market. 20 years when I was still living in Germany, hardly anyone had a credit card, while everyone was using automatic payments and electronic wiretransfers. I was very surprised when later (about 13 years ago) a US frie…

The benefit of credit cards is no one can literally drain your bank account via fraudulent access to a payment card directly tied to your bank (i.e. debit card in US nomenclature). This is a clear benefit regardless of location. Courts are slow and not scalable, and you don't want to be in a scenario where your bank has been drained right before you need to make important payments.

Having two accounts, one to store your money, and one that you move money into for payments as needed would offer the same protection.

Re: Can the Visa-Mastercard duopoly be broken?

#196

Post by mcv »

lotsofpulp wrote: post #165
PaulDavisThe1st wrote: post #150

Earlier quoted context omitted.

This, absolutely. It is totally embarrassing to watch my UK family or EU friends interact with their banking systems and compare it with the US. To be fair, things are improving a little bit. But we're still so very far behind the EU banking system. Instant, cost-free transfers between any two accounts, completed faster than you can lift your finger off your smartphone.

> Instant, cost-free transfers between any two accounts, completed faster than you can lift your finger off your smartphone. This is available to most people in the US via Zelle. I have been using it for nearly 10 years I think. https://www.zellepay.com/get-started Ideally, the federal government would have already made it a utility available to all, but for now the functionality is there for those who can get a bank…

But it's available to everybody in Europe regardless of what bank or other service they use.

Re: Can the Visa-Mastercard duopoly be broken?

#197

Post by marcodiego »

In Brazil we have pix: https://business.ebanx.com/en/resources/payments-explained/p...

It is mostly a novelty here. It allows simple payments to be made using a smartphone, smartwatch... you can use an app to transfer money from one person to another. Basically everybody is using it now. You can buy popcorn in the streets and pay via pix. In many places it is common than paper money and, I think, it is already more popular than credit cards. It also pays much less taxes.

I do think the credit card duopoly can be broken.

Re: Can the Visa-Mastercard duopoly be broken?

#198

Post by snazz »

PaulDavisThe1st wrote: post #146
julienb_sea wrote: post #136

Earlier quoted context omitted.

The benefit of credit cards is no one can literally drain your bank account via fraudulent access to a payment card directly tied to your bank (i.e. debit card in US nomenclature). This is a clear benefit regardless of location. Courts are slow and not scalable, and you don't want to be in a scenario where your bank has been drained right before you need to make important payments.

This does not negate the parent post at all. You're just describing another deficiency of the US banking system.

Out of curiosity, how do European banks avoid this issue? If my debit card or ACH info is compromised and someone drains my checking account, is there a way to use the stolen funds before the bank/court finishes their investigation?

Re: Can the Visa-Mastercard duopoly be broken?

#199

Post by chiefalchemist »

julienb_sea wrote: post #136
cycomanic wrote: post #103

Earlier quoted context omitted.

As your post illustrates credit cards are really a solution developped for the deficiencies in the US banking system which have been exported to the rest of the world due to the dominance of the US market. 20 years when I was still living in Germany, hardly anyone had a credit card, while everyone was using automatic payments and electronic wiretransfers. I was very surprised when later (about 13 years ago) a US frie…

The benefit of credit cards is no one can literally drain your bank account via fraudulent access to a payment card directly tied to your bank (i.e. debit card in US nomenclature). This is a clear benefit regardless of location. Courts are slow and not scalable, and you don't want to be in a scenario where your bank has been drained right before you need to make important payments.

Perhaps. Adding...

The benefit of credit cards is...credit, and the ability of the card to abstract the idea of spending money away from the consumer. Few things exemplify "out of sight, out of mind" better than credit cards. The model is amazingly profitable as well. Like printing money, literally.

Re: Can the Visa-Mastercard duopoly be broken?

#200

Post by rowanG077 »

philip1209 wrote: post #49

Fraud protection of credit cards is the root of modern e-commerce. In some ways, Visa and Mastercard are the privatized court systems of the internet. If I end up on a random, self-hosted ecommerce site and decide to make a purchase - what guarantee do I have that the item will show up or be as-described? If I bought something through a bank transfer, reversing that purchase would be incredibly difficult. And, suing…

> Visa and Mastercard are the privatized court systems of the internet.

You make it sound like that is a good thing. They are loose cannons that time and time again have shown they shouldn't be trusted.

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