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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?

#361

Post by Bedon292 »

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,…

It isn't costing me 3% directly, it costs the vendor. Which is already baked into the costs and charged to all of the customers no matter their payment method (typically). So I get other benefits and points / cash back on my purchase, and anyone not using a credit card misses out on those things.

Its kind of a messed up system honestly. The people who are already well off and can get the top of the line credit cards get all kinds of great benefits. And the costs are subsidized by those who cannot get them.

Re: Can the Visa-Mastercard duopoly be broken?

#362

Post by jollybean »

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…

I think this is completely wrong.

It's not the 'credit' that drives this, so much as the 'digitization'.

That can be achieved without credit.

European countries have been doing it for a long time.

Canada has 'Interac'.

There is utterly no need for VISA/MC.

A fairly simple banking standard could make it so that you could pay for stuff with some kind of card + PIN and that's it. There'd be a tiny fee which would help take care of fraud. Done. It already works in large economies.

The US has regulatory capture by large corporations.

Re: Can the Visa-Mastercard duopoly be broken?

#363

Post by kube-system »

crysin wrote: post #284
mcv wrote: post #249

Earlier quoted context omitted.

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.

Chip+PIN is 2FA. Something you have + something you know.

The issue is that you can process most debit cards through the credit network without the PIN for convenience.

Re: Can the Visa-Mastercard duopoly be broken?

#364

Post by scarface74 »

nobody9999 wrote: post #359
scarface74 wrote: post #290

Earlier quoted context omitted.

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.

>Taxi cabs drivers for instance were against being forced to use credit cards until they realized they got larger tips. I only have anecdata about this, but every taxi driver (50+) I've ever discussed CC vs. cash (this is in NYC and limited to medallion taxis) has said they prefer cash every single time . That's mostly because of the 5% CC processing fees on every transaction, as well as delays in receiving their mon…

https://www.nytimes.com/2009/11/08/nyregion/08taxi.html

Re: Can the Visa-Mastercard duopoly be broken?

#365

Post by thematrixturtle »

jpollock wrote: post #105

I don't understand how this is possible: "Merchants hand over some $138bn in fees each year; according to the National Retail Federation, a lobby group, it is their second-biggest cost after wages." Unless they're talking about more than just credit card fees? From the same article: "But credit-card fees are unregulated and meatier, usually sitting at about 2% of the transaction and rising to 3.5% for some premium-re…

I presume inventory is not considered an "operating cost", which is fair enough. Rent absolutely should be one though.

Re: Can the Visa-Mastercard duopoly be broken?

#366

Post by andersonmvd »

novok wrote: post #334
andersonmvd wrote: post #43

In Brazil many stores are dropping credit card and allowing only PIX (instant debit transfer) cause it's cheaper for business (0,22% avg transaction fee vs 1%-2% of credit cards - src (pt-only) https://g1.globo.com/economia/pme/noticia/2022/03/23/pix-e-m... ). The President of Brazilian Central Bank recently said that "credit cards will soon cease to exist" src (pt only) https://www.poder360.com.br/economia/campos-ne…

How does it work with travellers & tourists then?

Credit card is still common, all good. I've seen an exception though.

If you're in a "tourist destination" area, then no worries, I'm sure they will offer credit card as a payment option to keep you in business, but it's likely to be more expensive than paying using PIX.

When I was in the south of Brazil I used the "iFood" app (biggest food delivery app in Brazil) and I could only pay using PIX. In other regions, other options were available such as credit card.

Even if you need to do a PIX as a traveller, you can simply pay in cash to some person (hotel recepcionist I guess) so they can use their account to pay the PIX for you. Technically this person will scan a QR code and pay using their bank account.

If you want to have a PIX account yourself, at the moment you need to have a bank account in brazil afaik. After having your account, you have to register it using specific types of identifier, for example your mobile phone. Non-brazilian numbers are accepted in the standard, but not all banks accept them for now. It certainly will go over changes. It's a relatively new technology.

Re: Can the Visa-Mastercard duopoly be broken?

#367

Post by jollybean »

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…

It's not a 'natural' monopoly if they require heavy lobbying etc.

It's not the 'network effect' it's that the financial institutions i.e. the banking system want it that way, and will thwart any system otherwise.

It'll be easy to get away from the 3.5% fee we know that because of how it works in other countries.

America, shockingly, still does not use PIN chip cards, it's unbelievably nuts.

The simple addition of a PIN and a few other things can help reduce fraud substantially.

The complexity of the VISA network and disintermediation of 'ownership of the customer' creates problems for fraud tracking. At my bank the 'VISA' dept is totally separate from my other accounts - the entire customer service and data chain is separate. It's nuts.

Re: Can the Visa-Mastercard duopoly be broken?

#368

Post by JumpCrisscross »

GekkePrutser wrote: post #357
novok wrote: post #332

Earlier quoted context omitted.

Your going to pay with some sort of payment card, and credit cards are easy to sign up for and less hassle to use with payments than debit cards, which require you to tap in a pin all the time. Also less fraud protection, etc.

Here in Europe it's the complete opposite. They're hard to sign up for (banks don't like giving them) and you get registered for the loan which means you will have a harder time getting a mortgage or car loan. The more loans you already have the harder it gets. I heard in the US it works the opposite way. And the pin is required here on both (and rightly so IMO to protect against skimming). Only for minor contactless…

> pin is required here on both (and rightly so IMO to protect against skimming). Only for minor contactless payments it isn't.

Across Italy, France, Britain, the Netherlands and Portugal, over the last thirty days, I never had to provide a PIN over contactless. This was true for minor purchases to €5,000+.

Re: Can the Visa-Mastercard duopoly be broken?

#369

Post by yieldcrv »

vimy wrote: post #337
yieldcrv wrote: post #245

Earlier quoted context omitted.

biiig asterisk on that is necessary basically friends in the same country using a select few major banks are likely to have instant sepa available between them and it seem like the normal thing, while the reality is that instant-sepa is a massive patch work of availability between countries, banks, currencies an outsider to the EU trying to do business is unlikely to be a part of a social circle where everyone is usi…

Normal SEPA is max 2 days and usually it takes one. That’s not what I would call super slow.

Its what I would call super slow.

Re: Can the Visa-Mastercard duopoly be broken?

#370

Post by toomuchtodo »

rPlayer6554 wrote: post #240
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…

That is no solution. The limits are so low you can't do serious transactions with it. I think it's 1000$ instant daily transfer max, then 2500$ daily non-instant transfer.

It’s up to your bank. My max limits are $5k for known parties, $2k for new/unseasoned contacts (Chase).
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