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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?

#281

Post by throwaway2037 »

bergenty wrote: post #228
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.

And the EU system is way behind India’s UPI. That system really is a dream. It turned India into the world’s largest real time payment market and basically is Google’s model for FedNow they’re pitching to the federal government. It’s also what the EU is trying to emulate.

Woah, I did not know about India's UPI. And it serves more than India!

Check it out: https://en.wikipedia.org/wiki/Unified_Payments_Interface

    Unified Payments Interface (UPI) is an instant real-time payment system developed by National Payments Corporation of India (NPCI). The interface facilitates inter-bank peer-to-peer (P2P) and person-to-merchant (P2M) transactions.[1][2] UPI is an open source application programming interface (API) that runs on top of Immediate Payment Service (IMPS).[3][4] It is regulated by the Reserve Bank of India (RBI) and works by instantly transferring funds between two bank accounts on a mobile platform.
>

Re: Can the Visa-Mastercard duopoly be broken?

#282

Post by davchana »

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…

Ueah, I use zelle a lot; to move money between my incoming bank, store bank, & spending bank; all 3 different ones.

My auto loan credit union offers 0.5% off on loan APR if I bring my direct deposit to them, but doesn't support zelle.

Re: Can the Visa-Mastercard duopoly be broken?

#283

Post by jkaplowitz »

philip1209 wrote: post #237
TrueGeek wrote: post #99

Earlier quoted context omitted.

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.

Some of the best traveler-focused US rewards cards, like the Chase Sapphire Reserve cards, have no foreign transaction fees, even zeroing out what Visa charges them. And these cards are okay not only with frequent travel but even foreign residential addresses (only for customers who relocate - US address required at initial signup). I have one of those, used it while living in Canada, and soon expect to use it while living in Europe.

They do of course make money by charging a high annual fee, but another commenter already explained how the rewards offered by this card can still give more in value than the annual fee costs. This is absolutely true in my case.

Re: Can the Visa-Mastercard duopoly be broken?

#284

Post by crysin »

mcv wrote: post #249
bcrescimanno wrote: post #108

Earlier quoted context omitted.

That fear isn't irrational at all (at least, it wasn't). About 20 years ago, I had a debit card number stolen and my account was cleared out. It took about a month to get resolved an, in that time, I had some very unpleasant conversations with quite a few people including my landlord about my inability to pay my bills. In the grand scheme, I suppose it didn't harm me--but it was an extremely unpleasant situation to d…

How can someone clean out your account with just the card number? Was there no 2FA?

Debit cards in the US are still mostly swipe + PIN or chip. With the ATM there's daily limits of withdrawal amount but that's it. Maybe some issuers have a 2FA feature but none of the banks I've used have.

Re: Can the Visa-Mastercard duopoly be broken?

#285

Post by thathndude »

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…

Just for the record, as an attorney who somewhat specializes in this field, or at least has a concentrate and practice in this field, reversing a bank transfer is actually quite easy. You don’t have the same dispute rights as credit, but there is a dispute mechanism.

Re: Can the Visa-Mastercard duopoly be broken?

#286

Post by makeitdouble »

philip1209 wrote: post #247
makeitdouble wrote: post #208

Earlier quoted context omitted.

Yes. There is a huge divide between online and offline. For online your choice is to poney up the fee or not get paid at all. You’ll also probably target a wider audience and region restricted payment networks become less viable. Offline credit cards processing currently has super low fees, but it’s also a field where there is already way more competition than VISA/Mastercard, in particular there will be national car…

Yeah, but the danger is that cash-only businesses will have smaller check sizes, and at the end of the day that probably translates to less in alcohol sales. So, if sales decreases because of unfavorable payment methods (such as cash), then it's the high-margin item (alcohol) that probably gets affected most.

If we’re pondering about how to run a restaurant, I think that’s a complicated and nuanced discussion that will have different ins and out depending on what restaurant, where, serving who.

For instance a lot of lunch focused restaurants won’t serve much alcohol if at all. High volume low check size restaurants also abound. Do we also call cafes “restaurant” if they serve hot food at the table ? etc.

A tourism oriented restaurant will go so far as to accept American Express and swallow the fees, while a local restaurant can refuse anything other than cash and the local prepaid card, it really varies a lot.

PS: we might be missing context on if we’re only taking USA, as the article is about that, or on more global range, which I think is more interesting on the Visa/Mastercad discussion.

Re: Can the Visa-Mastercard duopoly be broken?

#287

Post by scarface74 »

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,…

Dealing with cash isn’t exactly free. You have to worry about employee theft, robberies, etc.

If I owned a business, I wouldn’t accept cash at all.

And no, it’s not a federal law that you have to accept cash except in service of debt.

https://www.federalreserve.gov/faqs/currency_12772.htm

Re: Can the Visa-Mastercard duopoly be broken?

#288

Post by hn_throwaway_99 »

JumpCrisscross wrote: post #189
sytelus wrote: post #161

Earlier quoted context omitted.

Why should transaction "cost" anything? It is just running arithmetic instruction on a number in a computer. I would argue batch processing makes no sense. If you send me me $10 and I send you $5 and bank wait for a month to run that batch, you might have already been bankrupt and have nothing to send so somehow you sent me money, I never received it and now everything is in big limbo. Transactions should be instant.

> Why should transaction "cost" anything? It is just running arithmetic instruction on a number in a computer. Every dollar that crosses a payments platform has a non-zero chance of creating some combination of legal, regulatory and customer-service costs. Frictionless transactions are as real world as their physics counterpart. > would argue batch processing makes no sense It does, from a deeply fundamental level. T…

> Every dollar that crosses a payments platform has a non-zero chance of creating some combination of legal, regulatory and customer-service costs. Frictionless transactions are as real world as their physics counterpart.

Yes, but pretty much all of those costs are a factor of the originating individual transactions. In reality net settlement is just one additional transaction where things can go wrong.

Again, I'm no fan of crypto (WRT how it's currently used, scams, etc), but there is no reason a permissioned blockchain couldn't do millions of transactions a second, all with real-time settlement, at a cost lower than batch processing.

Re: Can the Visa-Mastercard duopoly be broken?

#289

Post by crote »

PaulsWallet wrote: post #227
einpoklum wrote: post #158

Earlier quoted context omitted.

> Also, modern B2C SaaS is built on credit card subscriptions. That seems like circular logic. If there were alternatives to credit card and CC companies, SaaS would use that. In fact, in some countries, there are and it does. > The ability for a merchant to pull payments on a recurring basis from a credit card requires an incredible amount of trust. Why? If the merchant can't pull this month's payment, then services…

> In fact, in some countries, there are Such as?

How about we start with:

Andorra, Austria, Belgium, Bulgaria, Croatia, Cyprus, Czech Republic, Denmark, Estonia, Finland, France, Germany, Greece, Hungary, Iceland, Ireland, Italy, Latvia, Liechtenstein, Lithuania, Luxembourg, Malta, Monaco, Netherlands, Norway, Poland, Portugal, Romania, San Marino, Slovakia, Slovenia, Spain, Sweden, Switzerland, United Kingdom, Vatican City

They all use the same system, namely SEPA Direct Debit. It has only been around for 13 years or so. The Stripe website has a decent introduction: https://stripe.com/docs/payments/sepa-debit

So yeah, as a Dutch person all of my subscriptions use this. In fact, I get a bit annoyed when someone does not offer it, because I do not own a credit card.

Re: Can the Visa-Mastercard duopoly be broken?

#290

Post by scarface74 »

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…

Every study shows that consumers are willing to spend more on a credit card than when they are using cash. Taxi cabs drivers for instance were against being forced to use credit cards until they realized they got larger tips.
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