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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?

#341

Post by dalyons »

crote wrote: post #266
dalyons wrote: post #248

Earlier quoted context omitted.

> 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.

There’s at least some disincentive to doing this with card networks (have to talk to someone, do it too many times and they’ll cancel your card , etc). Automatic, no questions asked unarbitrated disputes would collapse the system very quickly, it’s an unlimited free stuff hack.

Re: Can the Visa-Mastercard duopoly be broken?

#342

Post by vimy »

snazz wrote: post #198
PaulDavisThe1st wrote: post #146

Earlier quoted context omitted.

This does not negate the parent post at all. You're just describing another deficiency of the US banking system.

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?

When you know someone’s bank account number you can only send them money. This issue simply isn’t possible.

Re: Can the Visa-Mastercard duopoly be broken?

#343

Post by lotsofpulp »

scarface74 wrote: post #313
holistio wrote: post #97

Earlier quoted context omitted.

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.

Well, my wife and I are kind of the degenerate case of getting credit card rewards since we are “digital nomads” traveling across the US, staying in mid tier Hilton hotels, using Uber, and flying everywhere. This means that 100% of our personal spending[1] goes on credit cards unlike most people who have car notes and mortgages/rent that they can’t put on credit cards. Just on credit cards we get: - 7-10% back on fli…

> 10%-14% back on hotels (Amex Hilton Aspire)

> This doesn’t count hotel and airline loyalty points.

Can you show your calculation for this? Hilton pesos get devalued on a daily basis in my experience, and they even nerfed their free weekend night with the Aspire credit card so that it is only useful for “standard” reward nights and not “premium” reward nights. Of course, all the nice hotels like Waldorfs and Curio will require premium reward nights.

I have never seen Hilton points worth more than $0.005 per point.

Re: Can the Visa-Mastercard duopoly be broken?

#344

Post by crazygringo »

> Households that bring in more than $135,000 a year recoup in points or perks around 0.6 percentage points of the interchange fees they pay.

This is bizarre to me. When the Citibank Double Cash credit card exists for no annual fee and pays 2% back...

why does anyone ever use any card that provides less? The only cards I use besides that one are the ones that give me 3% or 5% back in special categories.

The idea that people average only 0.6% back is absurd to me. Am I missing something here?

And we're not talking college students here with no credit history. This is households making more than $135K a year. Are people just not bothering to pick up free money?

Re: Can the Visa-Mastercard duopoly be broken?

#345

Post by supertrope »

hn_throwaway_99 wrote: post #288
JumpCrisscross wrote: post #189

Earlier quoted context omitted.

> 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…

Net settlement is a useful abstraction. Instead of a fully meshed network with every bank account in the country that was active that day having to be settled against each other, you can reduce the number of nodes to “just” the 14,000 banks and credit unions in the USA. Even that is simplified by running interbank settlement through a central clearinghouse at the Federal Reserve.

As long as operating a connection between two accounts has a non-zero cost and resolving consistency problems has a non-zero cost net settlement will be cheaper and easier.

Re: Can the Visa-Mastercard duopoly be broken?

#346

Post by jen729w »

_carbyau_ wrote: post #175
jen729w wrote: post #90

Earlier quoted context omitted.

Yeah typically around 1.5% in Australia. Which is often passed on to the consumer at the point of sale. We do have a non-Visa/MC payment system here in 'eftpos', which is ubiquitous. AFAIK this is exclusively debit not credit, but this isn't my area, I'm just a consumer. https://www.eftposaustralia.com.au

EFTPOS got kicked to the curb when paywave-with-no-pin started. And then the pandemic reinforced that idea for a lot of people. I don't know when I last used EFTPOS.

Aah so am I not actually using it? Like I said, no idea. Most consumers don't.

There's a terminal, I wave my [phone|watch|card] at it, it beeps, I walk away. Happy days.

In that case if it's a Visa card, is Visa the processing entity?

Re: Can the Visa-Mastercard duopoly be broken?

#347

Post by Gigachad »

jrvarela56 wrote: post #255
Gigachad wrote: post #238

Earlier quoted context omitted.

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

It's just a useful feature the fiat system has. The bigger point of crypto is that this trust can be parametrized and made transparent in a public ledger with less intermediaries. I see it as getting to feature parity, not as something that undermines trustless-ness - don't throw the baby out with the bathwater.

What actual value does this provide the buyer or seller? All of these blockchain solutions throw out a lot of buzzwords but after over a decade, I'm still yet to see any kind of benefit being provided.

Re: Can the Visa-Mastercard duopoly be broken?

#348

Post by ryandrake »

Rackedup wrote: post #273
5555624 wrote: post #61

Earlier quoted context omitted.

AMEX won't lower their surcharge. Until they do, they will always lose business to Visa and Mastercard.

It's pretty rare that my AMEX card gets refused...

Maybe USA-specific, but I've been AMEX-only for around 20 years, and have no regrets. They handle fraud and chargebacks with almost no effort or followup required. Very infrequently, I'll run into a cheap-ass merchant who doesn't take AMEX, and I will either not do business with them or just pay in cash.

Re: Can the Visa-Mastercard duopoly be broken?

#349

Post by crazygringo »

Spooky23 wrote: post #296

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 coll…

It really, really, really depends on the business.

Most places still accept cash as well so they still have all the expenses around cash management, that's not going away. And most places also have records/safeguards to see if employees are skimming -- bars are one of the few exceptions where it can be trickier, simply because almost no cash-paying customers want a receipt and it's dark and busy.

And when you factor in the fact that cash income can be hidden from the IRS in a way that credit card income can't, you can see how certain businesses might really wind up "paying" a lot more than just in credit card fees... ;)

Re: Can the Visa-Mastercard duopoly be broken?

#350

Post by kube-system »

klabb3 wrote: post #257
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.

There's nothing about cryptocurrencies that mandates irreversible transactions. A decentralized buffer/escrow system is quite possible, it wouldn't surprise me if it already exists.

True, but then you need someone to manage the escrow payouts. And doing that requires a trusted third party to do work, and so they charge fees to finance that. So, basically reinventing a credit card company, but on a blockchain.

And these services do exist and are in use on some tor network marketplaces.

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