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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?

#231

Post by treeman79 »

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…

Of course then there is Google and Apple where if you dispute any charge they will erase you .

Re: Can the Visa-Mastercard duopoly be broken?

#232

Post by searchableguy »

einpoklum wrote: post #167
xboxnolifes wrote: post #149

Earlier quoted context omitted.

Why would I not use a credit card? It's essentially a better debit card in every scenario, except for when paying with a credit card has an additional fee.

1. Extra hassle of interaction with a second company other than your bank, extra credentials, tracking balances, etc. etc. When I was living in the Netherlands I had my bank-account-attached Maestro card (or sometimes cash) and that was that. Except when foreign companies needed a credit card. 2. Fees. The whole point of credit cards - for the CC companies of course - is fees.

> Fees. The whole point of credit cards - for the CC companies of course - is fees.

On the merchant side, yes.

On the consumer side, no. There aren't many examples than Amex which is mostly popular in US charging high fees for their credit cards.

Most credit card companies make money from merchant run programs and overdraft & interest on late payments and penalties. They make half of their profit from vulnerable and poor people to pay rewards.

Re: Can the Visa-Mastercard duopoly be broken?

#233

Post by martinald »

cycomanic wrote: post #103
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…

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…

Well from my perspective Germany is incredibly backwards with payment infrastructure (apparently has got somewhat better during covid). I've been many many times and so many places do not accept any debit/credit card, only cash. It is incredibly annoying especially at restaurants and you want to pay for a group.

Youre right about the rest but in the US card acceptance is very very high (same in the UK, Nordics, etc). Germany definitely is not a shining light of electronic payments imo.

Re: Can the Visa-Mastercard duopoly be broken?

#234

Post by mcv »

mc32 wrote: post #92
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…

CoD. How did that even work? I mean how was fraud prevented? Did money get counted and balanced every night? How did they prevent drivers from getting robbed or inadvertently losing money (miscounting etc?$

These days of course you pay electronically on delivery. No actual cash involved. My grocery delivery does that, because the final cost depends on the weight of certain items as well as if I have any old crates or bottles to return.

So on delivery I pay either contactless by NFC or by QR code. Super easy, barely an inconvenience.

Re: Can the Visa-Mastercard duopoly be broken?

#235

Post by AlexandrB »

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…

It's also available in Canada through Interac. I'm still shocked when I go to the US and have to sign for a credit card transaction. Last time I did that in Canada was when Bush was president.

Re: Can the Visa-Mastercard duopoly be broken?

#236

Post by moffkalast »

leesalminen wrote: post #173
geph2021 wrote: post #106

Earlier quoted context omitted.

Yep. Also one of the reasons crypto will never work (as-is) for online, digital currency/payments. Customers don't want irreversible transactions.

I think it depends on the scenario. If you’re buying $0.50 worth of bananas at a farmer's market, then maybe irreversibility doesn’t matter. Could be even a $20 lunch bill, I've never done a chargeback at a restaurant before.

So what you're saying is that it's only useful for meaningless amounts? Sounds pretty pointless.

Re: Can the Visa-Mastercard duopoly be broken?

#237

Post by philip1209 »

TrueGeek wrote: post #99
arcticbull wrote: post #77

Earlier quoted context omitted.

The fees are 3% only in the US and the bulk of that is returned to buyers as cash back or loyalty points, and to offset the cost of loan origination and warranties. The EU has capped debit interchange at .2% and credit at .3%, Australia in the low 1s if I recall correctly. They just don’t really have rewards.

Interesting. How much money is lost by banks giving out cash back rewards to Americans using credit cards in Europe?

I'm not sure, but note that many banks make money on currency conversion, such as by offering non-market conversion rates.

Re: Can the Visa-Mastercard duopoly be broken?

#238

Post by Gigachad »

jrvarela56 wrote: post #181
geph2021 wrote: post #106

Earlier quoted context omitted.

Yep. Also one of the reasons crypto will never work (as-is) for online, digital currency/payments. Customers don't want irreversible transactions.

Whoever comes up with a way to encode this dynamic in a smart contract(s) could make a killing - or at least raise a lot of money hehe.

The dynamic is having some trusted 3rd party to manage disputes. Which defeats the point of crypto.

Re: Can the Visa-Mastercard duopoly be broken?

#239

Post by moffkalast »

hn_throwaway_99 wrote: post #118
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…

I don't think anyone disagrees with you in terms of the value of credit cards, the issue is whether their fees are worth it. Their huge profit margins, as well as how they previously fought tooth and nail against, for example, allowing merchants to levy a credit card surcharge, suggest that their duopoly position is allowing them to charge exorbitant amounts for their services.

Well 3% fees on every purchase on the planet is a pretty astounding amount of fucking money.

Explains why so many real world shops are still cash only.

Re: Can the Visa-Mastercard duopoly be broken?

#240

Post by rPlayer6554 »

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…

That is no solution. The limits are so low you can't do serious transactions with it. I think it's 1000$ instant daily transfer max, then 2500$ daily non-instant transfer.
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