Hacker News Board Hacker News, browsed like a classic message board
Live data from Hacker News

Can the Visa-Mastercard duopoly be broken?

economist.com

Post reply on HN
Print view View original

301–310 of 703 posts

Re: Can the Visa-Mastercard duopoly be broken?

#301

Post by GekkePrutser »

moffkalast wrote: post #230
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. If you're referring to SEPA transfers, then frankly that's a joke. There are 40 cent fees for every transfer and it usually takes hours if not a full day to process as the bank closes the system at like 4PM for some gdamn reason and all further entries have to wait until tomorrow. Like are they…

SEPA transfers within the Eurozone are not allowed to cost more than a local bank transfer. So if it costs 40 cents for you, it means it's because all your transfers cost 40 cents :)

Re: Can the Visa-Mastercard duopoly be broken?

#302

Post by kccqzy »

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…

Zelle is not always instant. There are two ways for a Zelle transaction to clear. The fast one goes through the Visa network, the same network for credit cards and debit cards. The slow ones goes through ACH, which takes several days. It is generally not possible for two recipients to know which network Zelle will use beforehand.

ADDENDUM: The official marketing page for Zelle at https://www.zellepay.com/faq/how-long-does-it-take-receive-m... has this to say about transaction speed:

> Money sent with Zelle® is typically available to an enrolled recipient within minutes.

> If it has been more than three days, we recommend confirming that you have fully enrolled your Zelle® profile, and that you entered the correct email address or U.S. mobile number and provided this to the sender.

Note the weasel word "typically" in the first sentence. If all Zelle transactions went through Visa, all such transactions would be instant and they wouldn't have the need to add the word "typically" in the first place.

The second paragraph asks you to wait three days. That's basically the Zelle fallback path when it uses ACH under the hood.

ADDENDUM 2: This HN conversation really piqued my interest and did more research. So apparently Zelle now uses one of three different networks. According to https://www.americanbanker.com/payments/news/how-the-clearin... :

> The Zelle P2P service currently uses two separate rails to settle payments, depending on the particular transaction, including the ACH network and the two debit card networks: Visa Direct and Mastercard Send. By adding the RTP network, Early Warning will be able to reduce its reliance on ACH, which can at times take days to settle and is operated only in batch mode during business hours.

Re: Can the Visa-Mastercard duopoly be broken?

#303

Post by GekkePrutser »

Jensson wrote: post #254
happyopossum wrote: post #220

Earlier quoted context omitted.

> they lack the authorisation to do so How does the German banking system prevent an unscrupulous online retailer from charging you 500€ for a 50€ item? Or charging you twice?

2FA, you get a popup in your bank app asking "Do you want to pay X euro to Y?" for online payments. Can turn that off if you want, but it isn't a big bother.

It also only happens for higher-value transactions here. I don't have to authorize every tenner unless it's the 10th in a row or something

Re: Can the Visa-Mastercard duopoly be broken?

#304

Post by ferdowsi »

GekkePrutser wrote: post #293
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 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.

The credit card companies strongly push merchants to adopt EMV chips by shifting liability for chargebacks onto merchants who are still using magstripes. I don't think I've seen a non-chip capable terminal in the last year.

Re: Can the Visa-Mastercard duopoly be broken?

#305

Post by ironick09 »

maccard wrote: post #226
Jensson wrote: post #171

Earlier quoted context omitted.

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,…

In the EU credit cards can't be charged more than other payment methods anymore, so _youre_ not paying 3% more.

EU credit cards also don’t have any (or anything close to) the benefits US cards have, right?

Re: Can the Visa-Mastercard duopoly be broken?

#306

Post by GekkePrutser »

JumpCrisscross wrote: post #145
nixass wrote: post #121

Earlier quoted context omitted.

Why would I use credit card at all? Sure it does help when traveling but not much use for it otherwise

> Why would I use credit card at all? Float. If I charge $10k to a card, I get an interest-free loan until the balance has to be paid off. In a zero-rate environment that's meaningless. But even at the 30-day's 2.22% [1], that's almost twenty bucks. I'm probably paying about 1% more for the CC fees, but I can use my card that gives me 1.5% back on everything. [1] https://home.treasury.gov/resource-center/data-chart-c…

That seems so much hassle for so little.

But in Europe credit cards don't give cashback.

Re: Can the Visa-Mastercard duopoly be broken?

#307

Post by SergeAx »

lotsofpulp wrote: post #193
Teever wrote: post #186

Earlier quoted context omitted.

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.

Buuuuut as banks they have a totally different privacy policy than a 3rd party payment system, aren't they?

Re: Can the Visa-Mastercard duopoly be broken?

#308

Post by ravel-bar-foo »

dhosek wrote: post #28
toomuchtodo wrote: post #4

https://www.moderntreasury.com/learn/what-is-fednow > FedNow is an instant payment service for both individuals and businesses. Once launched, the initial transaction limit will be $25,000. This means that FedNow be more useful for small businesses and retail payment needs until it is widely adopted and the transaction limit grows. > In early 2022, the Federal Reserve released pricing and fee details for their real-t…

>Merchants can pass the CC surcharge through Unless things have changed in the last 20ish years, if you accept credit cards you’re not allowed to charge different prices for CC vs non-CC payments (although there are apparently some carve-outs for gas stations).

There was a relevant Supreme Court decision in 2017. Credit card surcharges are considered part of the first-amendment rights of the merchant (although they seem to be regulated on a state-by-state basis). No, I don't think the first amendment justification makes sense either.

Re: Can the Visa-Mastercard duopoly be broken?

#309

Post by redditmigrant »

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…

Given how large ecommerce has gotten in China, it begs the question, are credit cards truly the necessary pillar? ECommerce even in the US is extremely top heavy, with Amazon having ~40% share, so while the allure of a random ecommerce site is an interesting example, thats not the pre-dominant usage pattern.

Re: Can the Visa-Mastercard duopoly be broken?

#310

Post by adrr »

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…

3.5% isn't what merchants pay unless you're tiny. Highest interchange is around 2.5 and maybe you'll pay 0.25% in settlement fees.

What interchange covers mainly is the cost of capital to give a consumer a 60 day interest free loan. Capital isn't free and this has real world costs to the bank underwriting the loans. Why you Chase or BOA debit card interchange rates are 0.05% because they aren't lending out their own money.

Post reply on HN