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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?

#291

Post by ZephyrBlu »

acchow wrote: post #260
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…

> I have been using it for nearly 10 years I think. Zelle launched in June 2017

Freaking hilarious. It astounds me how advanced, yet also archaic the US is.

Re: Can the Visa-Mastercard duopoly be broken?

#292

Post by lotsofpulp »

acchow wrote: post #260
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…

> I have been using it for nearly 10 years I think. Zelle launched in June 2017

It was rebranded, but the functionality existed before, at least if you were transferring between the big banks.

> In April 2011, the clearXchange service was launched. It was originally owned and operated by Bank of America, JPMorgan Chase, and Wells Fargo.[6][7] The service offered person-to-person (P2P), business-to-consumer (B2C), and government-to-consumer (G2C) payments.[8]

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

Re: Can the Visa-Mastercard duopoly be broken?

#293

Post by GekkePrutser »

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…

The US credit card system is also the reason we still have magstripes and all the fraud that goes along with it because chip & pin is still not everywhere there. Not to mention making payments available using nothing but info printed on the actual card being a very bad idea.

Especially because in Europe we lack all the cool payment protection and insurance stuff that US cards offer.

Re: Can the Visa-Mastercard duopoly be broken?

#294

Post by astura »

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…

>I was very surprised when later (about 13 years ago) a US friend told me that they were still using cheques for most things.

Your friend is strange, the only thing I used checks for 13 years ago was rent.

Re: Can the Visa-Mastercard duopoly be broken?

#295

Post by pulisse »

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.

> 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 difference is a consequence of law, not payment technology. It's entirely possible for someone to make fraudulent charges on a card up to its limit (which would be the analogue of draining a bank account), but CC companies are required by law to absorb fraud beyond a token amount. There's no technical reason why bank accounts couldn't be similarly protected, but banks have thus far been successful in preventing such laws from being enacted.

Re: Can the Visa-Mastercard duopoly be broken?

#296

Post by Spooky23 »

The whole premise of the article is dumb. Lots of small businesses like to cry about credit card fees, which is absurd given the value offered for the price charged.

Not only do they drive spending, but they eliminate the casual embezzlement and pilferage that plagues cash businesses. My grandfather ran pubs, and use to quip that he’d fire any honest bartender, because the guy was smarter than him.

When I was in college I worked for a company one summer that installed parking gates with credit card payment systems at big institutions. One customer was a hospital who reported 28% increases in parking sales… the guys who worked there were skimming the toll for years.

You also need to pay labor to count the tills, manage the cash, etc. In any case, show me someone whining about a 3% fee and you’re showing me someone who’s out of touch with their business.

Re: Can the Visa-Mastercard duopoly be broken?

#297

Post by crote »

hn_throwaway_99 wrote: post #58
sytelus wrote: post #23

I still haven't understood why credit cards companies need to go through this complex multi-hop "settlement" pipeline that takes almost a day for transactions to get "processed". Is it because some banks still depend on mainframes doing batch processing?

> Is it because some banks still depend on mainframes doing batch processing? Pretty much all banks use mainframes to do batch processing. "SFTP runs the world". I got heavy into fintech a couple years ago, and at first I thought "This is all insane." I was coming from a SaaS world where it's easy to think about transactional guarantees with API calls. I finally "got it" when I realized that pretty much all of our fi…

Is this still universally the case?

The Eurozone has been working on SEPA Instant Credit Transfer for a few years now. It allows transferring of money within 10 seconds, even to a different bank in a different country. The maximum time is 20 seconds in exceptional circumstances. How would this work with batch processing?

Re: Can the Visa-Mastercard duopoly be broken?

#298

Post by GekkePrutser »

AlexandrB wrote: post #235
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…

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.

Same here in Europe. I've not signed my card for more than a decade because I've never been asked to provide a signature.

Re: Can the Visa-Mastercard duopoly be broken?

#299

Post by randomran01234 »

rvz wrote: post #41
sudden_dystopia wrote: post #3

This is the best, and in my opinion, only use case for Ethereum

No. Not even remotely close. Both Bitcoin, and Ethereum have both proven that they are unsuitable for payments. Both with their demonstrably slow, expensive and unscalable layer 1 and their ducktaped contraptions of their non standard layer 2 solutions. I can only see a few cryptocurrencies that are suitable for the payments use-case which the ones considered for this are part of the ISO 20020 standard.

It's very possible that an EVM-compatible L2 eventually captures this space, or a subset of it.

Harder to imagine any L1 blockchain ever being able to reach the throughput needed without dramatic trade-offs in decentralization, censorship-resistance and security. At that point you might wonder how it would be any different than a centralized Visa or Mastercard network.

Re: Can the Visa-Mastercard duopoly be broken?

#300

Post by ravel-bar-foo »

holistio wrote: post #97
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.

Nobody really has rewards. We don't have them in Europe, and some people in the USA think they have them. What they have is crazy high credit card fees and the need to juggle a bunch around to get a few things credit card companies decided to buy for you en masse. When I buy a $5 latte, I give Visa $0.01. When you do the same, you pay $0.15. Come the hell on. "REWARDS". Smh.

'Rewards' are paid for in merchant's fees, which are in turn paid for by all consumers (even those who don't use credit cards). This is why non-credit customers should prefer businesses which have credit card surcharges: it's like getting the 'rewards' at checkout.
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