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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?

#371

Post by bastawhiz »

pulisse wrote: post #295
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.

> 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 require…

There's an important difference here: bank accounts are not credit. If my card is stolen and charges are racked up, I'm no poorer until the fraud is detected and resolved. You don't spend cash when you use a credit card, you spend credit. There isn't a legal remedy for this.

Re: Can the Visa-Mastercard duopoly be broken?

#372

Post by GekkePrutser »

JumpCrisscross wrote: post #368
GekkePrutser wrote: post #357

Earlier quoted context omitted.

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+.

Is that with your phone perhaps? With those there is no pin needed because you already authenticate on the phone itself. I don't have to with Samsung Pay either.

But on the card itself I have to above €75 (or after transactions accumulating to that amount)

Re: Can the Visa-Mastercard duopoly be broken?

#373

Post by lsc36 »

asiachick wrote: post #241
chiefalchemist wrote: post #199

Earlier quoted context omitted.

Perhaps. Adding... The benefit of credit cards is...credit, and the ability of the card to abstract the idea of spending money away from the consumer. Few things exemplify "out of sight, out of mind" better than credit cards. The model is amazingly profitable as well. Like printing money, literally.

Interestingly, in Japan, at least until recently, the way credit cards worked is, when you buy something you'd have to say how many payments you were going to pay it off in and your bank would automatically take money from your bank account at that level. In other words, you'd go to some electronics store and by a $2000 TV and they'd ask "how many payments". You'd say 10 and you'd end up paying $200 a month. I don't…

Card companies _do_ charge interest if you pay in (usually) 3 or more installments, unless explicitly mentioned being interest-free.

Re: Can the Visa-Mastercard duopoly be broken?

#374

Post by kube-system »

crazygringo wrote: post #344

> 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…

Obviously not all credit cards are the Citibank Double Cash card.

But, there are multiple answers:

1. Some cards have features other than cash back that people want instead. i.e. promotional interest rates.

2. Some people carry a balance, in which case the benefits of using a lower interest card may way outweigh any cash back

3. Not everyone with incomes 135k+ have good credit scores.

Re: Can the Visa-Mastercard duopoly be broken?

#375

Post by refurb »

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…

Credit cards are superior to debit cards in every way.

Fraudulent charges can be reversed immediately, don’t impact you at all (since the money isn’t yours). Chargebacks can force a retailer to give your money back.

The benefits are endless.

Re: Can the Visa-Mastercard duopoly be broken?

#376

Post by refurb »

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.

That has more to do with a foreign credit card.

I haven’t signed in the US for a credit card transaction in at least 5 or more years.

I do if I use my card outside the US.

Re: Can the Visa-Mastercard duopoly be broken?

#377

Post by GekkePrutser »

ferdowsi wrote: post #304
GekkePrutser wrote: post #293

Earlier quoted context omitted.

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.

Good but still a decade too late. The CC companies won't remove the actual magstripe (and thus the vulnerabilities it represents!) until it's not necessary anywhere.

Here it's been banned from all payment terminals since 2014 IIRC. But skimming is still a thing because they send the card scans to other countries where magstripes are still permitted :(

Re: Can the Visa-Mastercard duopoly be broken?

#378

Post by deznu »

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…

You're forgetting about taxes though. A lot of cash-based transactions are not declared.

Edit: rather, it's easier to not declare cash income, than income from credit cards. Also keep in mind that the taxi company may take a cut of the revenue too.

Re: Can the Visa-Mastercard duopoly be broken?

#379

Post by mixmastamyk »

refurb wrote: post #375
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…

Credit cards are superior to debit cards in every way. Fraudulent charges can be reversed immediately, don’t impact you at all (since the money isn’t yours). Chargebacks can force a retailer to give your money back. The benefits are endless.

They aren't a good solution to paying a friend $10 or your rent every month.

Re: Can the Visa-Mastercard duopoly be broken?

#380

Post by [deleted] »

vimy wrote: post #342
snazz wrote: post #198

Earlier quoted context omitted.

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.

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