Can the Visa-Mastercard duopoly be broken? • Hacker News Board

Re: Can the Visa-Mastercard duopoly be broken?

#261

Post by slaymaker1907 » Wed, Aug 17, 2022, 11:50 PM UTC

legitster wrote: post #59

I'm pretty confident Visa's dominance is a completely natural monopoly. There are plenty of 3rd party payment options (Amex and Diners' are still both fairly widely accepted) and nothing is stopping consumers from having multiple cards. But I think the network effects are too strong and we are seeing a pretty normal Pareto distribution. Even if you added 20 new market entrants with good coverage, consumers and busine…

Yeah, I think a lot of people are better off just paying 3.5% more but with the fraud protection. However, I still think this will be a huge improvement for a lot of other stuff like moving money between accounts at different banks or paying for large purchases which are guarded by a proper contract such as paying rent, buying a car, etc.

Re: Can the Visa-Mastercard duopoly be broken?

#262

Post by jjtheblunt » Wed, Aug 17, 2022, 11:52 PM UTC

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…

what's a charge back? (not joking: in the US and I don't know)

Re: Can the Visa-Mastercard duopoly be broken?

#263

Post by yao420 » Wed, Aug 17, 2022, 11:52 PM UTC

hn_throwaway_99 wrote: post #178

Enginerrrd wrote: post #96

Earlier quoted context omitted.

>I'm no fan of crypto, but the one place where I can see real utility for blockchain is as a backend settlement service for banks. So... what does the crypto provide there that a simple authenticated communication protocol with a few redundant centralized servers doesn't?

There are large benefits to not relying on a few redundant centralized servers in that case. We have "clearing houses" now, and in most cases they shouldn't be necessary. If you had something like a "permissioned blockchain", any financial institution could easily validate that everything was settled, in real time.

Well someone has to write the code and run the nodes. I’m not on the side of clearing houses but I don’t see the improvement bid switching to a system run by a crypto foundation and a few blockchain validator companies.

Re: Can the Visa-Mastercard duopoly be broken?

#264

Post by Am4TIfIsER0ppos » Wed, Aug 17, 2022, 11:53 PM UTC

yes but by mandating that cash is used for payments instead of what the govt here is doing with its 80k fines for businesses that don't prop up the electronic payment scam.

Re: Can the Visa-Mastercard duopoly be broken?

#265

Post by rwbt » Wed, Aug 17, 2022, 11:55 PM UTC

kelnos wrote: post #138

aidenn0 wrote: post #70

Earlier quoted context omitted.

If checking accounts get debit-only RTNs for cheap/free, this could potentially catch on. $0.06 per transaction with $25/month subscription fee is incredibly cheap, plus no chargebacks! Biggest issue I see is that the larger banks might not offer this to their customers so as to not cannibalize their credit card businesses and/or in-house payment system.

> $25/month subscription fee is incredibly cheap Cheap?! That's $300/yr, and is more expensive than most credit card annual fees (for cards that even have annual fees). And with FedNow you don't get any credit card benefits. I mean, I pay $550/yr for one of my credit cards, but I get like $2k of value out of it per year in benefits. Why would I want to pay $300/yr for something that lets me do something I can already…

That $25/month fee is for accounts that accept payments. I don't think debit accounts will have such a ridiculous fee.

Re: Can the Visa-Mastercard duopoly be broken?

#266

Post by crote » Wed, Aug 17, 2022, 11:55 PM UTC

dalyons wrote: post #248

mchusma wrote: post #203

Earlier quoted context omitted.

I am an online merchant. The visa Mastercard fees are enormously high, so not. We are not "happy to pay it". The 3% is not to cover any consumer protection, that cost is born by the merchants. When a dispute is made by a customer, the merchant is assessed a fee, and almost always loses the dispute. The fees are so high that credit card companies give extremely high rewards back, which is in effect a regressive tax. I…

> consumers can dispute anything within x days and merchants have to issue a refund. No administration. Er merchants will get instantly crushed with first party fraud. As soon as people realize they can acquire a good and then get an instantly approved dispute the day after, game over. Unless thats not what you mean?

Which is currently already happening. I work at a small online store, and we are extremely lenient when it comes to cancelling, returning, or warranty. And yet some customers decide to just do a chargeback instead, which costs us a significant amount of money. Almost all of the time we would've happily send them a replacement or given them a refund!

As a merchant, credit cards suck.

Re: Can the Visa-Mastercard duopoly be broken?

#267

Post by RHSeeger » Wed, Aug 17, 2022, 11:55 PM UTC

mcv wrote: post #225

snazz wrote: post #198

Earlier quoted context omitted.

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?

How would they drain your bank account? There's quite a bit of 2FA they'd have to defeat. Easiest is stealing the card after skimming their PIN, but if you know it's stolen, you're going to block it pretty quickly, and there are limits to how much you can withdraw from an ATM. The big problem with credit cards is that all the info needed to authorize a transaction is right there on the card. The second problem is tha…

In the US, automated payments tend to be "pull based", where a company tells your bank "give me this much from this account, I have permission". The company can lie but, by the time you find out, the money is already gone and it can take a long time to get it back. The bank has no real incentive to get your money back.

With a credit card, on the other hand, you see what was taken _before_ you pay them. So you can tell the credit card company "this amount that was charged to me is not me, I'm not paying that". Then the credit card company has to look into it; they have incentive to figure out what happened (unlike banks) because they aren't getting payed back their "loan" to you until they do.

Re: Can the Visa-Mastercard duopoly be broken?

#268

Post by celestialcheese » Wed, Aug 17, 2022, 11:56 PM UTC

mchusma wrote: post #203

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 am an online merchant. The visa Mastercard fees are enormously high, so not. We are not "happy to pay it". The 3% is not to cover any consumer protection, that cost is born by the merchants. When a dispute is made by a customer, the merchant is assessed a fee, and almost always loses the dispute. The fees are so high that credit card companies give extremely high rewards back, which is in effect a regressive tax. I…

> The fees are so high that credit card companies give extremely high rewards back, which is in effect a regressive tax.

This. There's so much incentive to encourage shitty consumer behaviour on the CC side and it destroys margins on ecomm.

Those who are interested in learning more should read this article[1] on a cycling ecomm company and their issues with fraud and chargebacks. It's very accurate with what I've experienced.

1 - https://cyclingtips.com/2022/07/interview-silca-on-amazon-e-...

Re: Can the Visa-Mastercard duopoly be broken?

#269

Post by odrekf » Wed, Aug 17, 2022, 11:58 PM UTC

tossl568 wrote: post #194

odrekf wrote: post #179

Earlier quoted context omitted.

>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.

A layer on top of something is not something, it's something else.

Dude, you need to chill, you ruined BTC for everyone and now you are hostage to your own failed investment. Remember it was supposed to be cash. Accept your loss and stop lying to people, BTC doesn't work as cash, and neither does LN. Find something else to do with your life.

BCH is not as scam, it's cash, it's advertised as cash, and has always worked perfectly as cash.

BTC and LN are false advertisement.

Re: Can the Visa-Mastercard duopoly be broken?

#270

Post by crote » Wed, Aug 17, 2022, 11:58 PM UTC

moffkalast wrote: post #251

atombender wrote: post #191

Earlier quoted context omitted.

...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,…

The thing about debit cards though, it's a different system and they don't work for online payments which makes them effectively useless. > People seem more wary of accruing debt in Europe; it's easy to lose control over your personal finances with a credit card. Well using credit means you're taking a loan, and subsequently paying interest on that loan even if it's just a month. Why would you pay interest on a loan…

Ehhh, no? Our debit cards are used for in-store payments, and literally every single bank allows you to use them for online payments too. We just developed systems which don't depend on handing random people a bunch of "secret" numbers and hoping they don't defraud you.

For example, in The Netherlands *everyone* uses iDeal. Basically, the store does a 302 redirect on checkout to your bank, sending along the money owed and the destination account. The bank authenticates the user, confirms that they indeed want to pay it, and redirects back to the store. It... just works!