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Can the Visa-Mastercard duopoly be broken?

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Re: Can the Visa-Mastercard duopoly be broken?

#481

Post by lonesword »

PaulDavisThe1st wrote: post #150
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…

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.

Are you saying that the USA is still far behind the EU banking system? That's news to me - I've always assumed that banking, of all things, would be far superior in the US. I've always imagined that the experience in the US, at least compared to German banks, would be one of slick apps and super-friendly paperwork because 1) banks want your money 2) something something capitalism.

When I want to do a domestic transfer in Germany, if the recipient's bank does not accept SEPA Instant Pay (looking at you, Baader Bank), then it takes around 2-3 _days_ for my funds to get to the other person. That's insane. In India, our slow transfer (It's called NEFT. UPI is the new shiny instant transfer system) takes at most a day and even before UPI no-one was using NEFT because there were faster alternatives. I've always thought that the slow fund transfers were a German thing and that the US would be better. Guess the grass is not greener on the other side.

Re: Can the Visa-Mastercard duopoly be broken?

#482

Post by Symbiote »

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.

The liability shift in Britain was on 1 January 2005.

In the USA, gas station transactions only had this shift in 2021.

> The magnetic stripe will start to disappear in 2024 from Mastercard payment cards in regions, such as Europe, where chip cards are already widely used. Banks in the U.S. will no longer be required to issue chip cards with a magnetic stripe, starting in 2027. [1]

My cards' magnetic stripes haven't been used for at least 10 years.

[1] https://www.mastercard.com/news/perspectives/2021/magnetic-s...

Re: Can the Visa-Mastercard duopoly be broken?

#483

Post by nirimda »

Silhouette wrote: post #421
maccard wrote: post #226

Earlier quoted context omitted.

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

Or from another point of view you're now hit with the higher bill even if you choose to pay by a more efficient method. It's debatable whether the EU's rule actually helps cardholders or whether it just protects the card networks and their overpriced payment schemes.

In Australia they allowed merchants to pass on the payment network costs, and a good lot of them did - so you might pay x for cash, x + 0.5% for debit card or EFTPOS (equiv of European EC card) or x + 2.5% for credit card. I think it was partially responsible for a significant reduction in the use of credit cards in the country. But perhaps not the dominance of Visa/Mastercard in POS transactions, since most debit cards are in their network.

At first I hated the rule, but then I realised it was exactly a rule that put the decisions in the hands of the customer and the merchant and took power from the card networks.

(I don't live in Australia at the moment so maybe this is changed. I gather there is now also app-based credit payments which have eaten into Visa/Mastercard's market, both for credit payments and for POS transactions. But how significant, who knows)

Re: Can the Visa-Mastercard duopoly be broken?

#484

Post by scarface74 »

mgfist wrote: post #396
scarface74 wrote: post #313

Earlier quoted context omitted.

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…

Glad it works for you but sounds like a personal haha

Sounds like a personal?

Re: Can the Visa-Mastercard duopoly be broken?

#485

Post by GekkePrutser »

Nursie wrote: post #411
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…

> 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. Which part of Europe? That's not how it works in the UK. You build up a record by using credit products and it benefits your score to keep them in good order. Though it is how it works here in Australia. When…

> Which part of Europe? That's not how it works in the UK. You build up a record by using credit products and it benefits your score to keep them in good order.

Good point, Europe is not one entity. The UK is more aligned with the US legally (common law etc) than the rest of Europe. Especially now with Brexit.

In the Netherlands it's definitely something that works against you. Even something simple like a phone contract with subsisided hardware will lower the credit score.

Re: Can the Visa-Mastercard duopoly be broken?

#486

Post by GekkePrutser »

cthalupa wrote: post #407
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…

>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. In the US, loans are distinct from lines of credit and credit cards. Just having a credit card won't make it easier for you to get a loan, but having a his…

> I've actually been quite successful in utilizing my Amex card across roughly two dozen countries in Europe and Asia, so this doesn't really match my experience. I haven't specifically tried to use it for a taxi in Paris, however. I do keep a Visa in my wallet in case I need it, but my bigger issue has been places that don't take cards at all, and having to carry cash. Cash only locations are basically nonexistent in the US - even the smallest hole in the wall type places and random food stalls in gas stations tend to allow for cards ever since Square became popular.

I've never used it in Asia, but for example the main Taxi companies like G7: https://www.g7.fr/en/paris-taxi-fares do accept credit cards but are very difficult about amex. When you wait at Charles de Gaulle airport there's some bouncer in the taxi queue who will ask specifically what card you have and if you have Amex then they have to haggle with the queue of waiting taxi drivers for one to accept it. And often when you do get to your destination the machine is suddenly 'broken'.

One of the taxi drivers told me that amex charges them a lot more than the others.

In Romania you'd be hard-pressed to find a taxi that accepts cards at all and if you show them an Amex they will laugh in your face (though taxi drivers aren't very nice people there generally speaking, two of my colleagues even got literally robbed).

The same with other minor expenses. Like rail tickets, food in a 7/11 style shop etc... The big hospitality outlets like upmarket restaurants and hotels do generally accept it. But my work requires me to pay all my travel expenses with amex and I get a lot of bitching from them if I don't. But especially in Eastern Europe I just don't get anywhere with it.

Re: Can the Visa-Mastercard duopoly be broken?

#487

Post by mcv »

kube-system wrote: post #363
crysin wrote: post #284

Earlier quoted context omitted.

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.

When contactless payment was new in NL, it was possible to pay up to € 25 without PIN, which set of all sorts of alarm bells in my head. € 25 isn't much, but the idea that payments could be done without my PIN felt deeply wrong, so I disabled it. I only really started doing contactless payment when it was supported by the banking app on my phone, which always asks for PIN.

That said, PIN isn't terribly secure either; for a common 4-digit PIN, there are only 10,000 possibilities. Too many to test by hand, but trivial to automate if you have access to the algorithm. And for the first PIN cards, the data was on a trivially readable magnetic strip. So if you have the algorithm and the contents of that mag strip, it's trivial to just run through all possibilities. That algorithm was a closely guarded secret, but still, security by obscurity isn't great, so later they replaced the mag strip with a chip that doesn't spill its contents so easily.

So not all 2FA is a guarantee for good security.

Re: Can the Visa-Mastercard duopoly be broken?

#488

Post by searchableguy »

blackoil wrote: post #433
searchableguy wrote: post #209

Earlier quoted context omitted.

Predictability in cash flow and free rewards in India. Most places do not charge extra for credit cards and nor do you pay annual credit card fee in most cases. It's an interest free loan for upto 45 days. Many banks will provide 3.5 - 6% interest without risk. If you spend a lot monthly, it's a free nice dinner every month without doing anything. If you can use the capital, it can be worth more. They provide free lo…

> Chargeback protection is necessary in India. Why?? Practically all transactions using debit card/UPI require PIN/OTP.

Scam and fraud from companies and vendors.

I've had official employees from a big company try to scam me. I now only pay using credit card.

Re: Can the Visa-Mastercard duopoly be broken?

#489

Post by mcv »

RHSeeger wrote: post #267
mcv wrote: post #225

Earlier quoted context omitted.

How would they drain your bank account? There's quite a bit of 2FA they'd have to defeat. Easiest is stealing the card after skimming their PIN, but if you know it's stolen, you're going to block it pretty quickly, and there are limits to how much you can withdraw from an ATM. The big problem with credit cards is that all the info needed to authorize a transaction is right there on the card. The second problem is tha…

In the US, automated payments tend to be "pull based", where a company tells your bank "give me this much from this account, I have permission". The company can lie but, by the time you find out, the money is already gone and it can take a long time to get it back. The bank has no real incentive to get your money back. With a credit card, on the other hand, you see what was taken _before_ you pay them. So you can tel…

Dutch banks used to work like that too, by "incasso", and in fact still do to some extent. But any incasso that hasn't been directly authorised by you with the bank can be undone (and apparently at an additional fee to the company that originated it; they really don't like it when that happens). So that's actually very similar to how credit cards work, but without the additional fee. These days you can easily manage all upcoming incassos through your banking app and block them before they happen, though I generally prefer to pay such recurring payments through automated "push" transfer.

Re: Can the Visa-Mastercard duopoly be broken?

#490

Post by synchrone »

apexalpha wrote: post #470
guntab-dan wrote: post #331

Earlier quoted context omitted.

The problem with Zelle is that it's not safe to use for anything except payments to friends and family. The Zelle user agreement [1] puts this warning in all-caps: "YOU SHOULD NOT USE THE ZELLE® SERVICE TO SEND MONEY TO PERSONS WITH WHOM YOU ARE NOT FAMILIAR OR YOU DO NOT TRUST. ZELLE® DOES NOT OFFER A PROTECTION PROGRAM FOR AUTHORIZED PAYMENTS MADE WITH THE SERVICE" [1] https://www.zellepay.com/legal/user-service-ag…

I've never heard of any protection like this in the EU banking system. If you transfer money to a scammer it's simply gone. It sucks for the 0,0001% of people who get scammed some time but is it really needed that the bank takes on this role?

If you initiate it - yes. If the seller charges by IBAN via SEPA - you get 8 weeks to chargeback, no questions asked
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