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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?

#551

Post by rkagerer »

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…

In some ways, Visa and Mastercard are the privatized court systems of the internet.

Agreed. A dispute resolution mechanism baked-in would go a long way toward making crypto a more viable alternative, especially if it delivered more effective justice than the credit card companies' stale policies and their opaque decision makers who don't really give a crap.

Re: Can the Visa-Mastercard duopoly be broken?

#552

Post by chrischen »

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…

Credit cards don't do jack shit for fraud protection. They simply market it as 0-fraud liability and the rest of the participating parties eat the costs (at least for online transactions and pre-chip days). Before there were chips, guess who got hit with the loss if fraud happened on a card? It was the merchant. For online transactions, merchants are still hit with the loss since the chip is not used. If you want actual fraud protection features you have to pay extra for products like Stripe radar or Siftscience. With chip finally some fraud liability shifted to the merchants, but partially because it's pretty much impossible to clone a chip card.

Re: Can the Visa-Mastercard duopoly be broken?

#553

Post by zzzeek »

rkagerer wrote: post #551
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…

In some ways, Visa and Mastercard are the privatized court systems of the internet. Agreed. A dispute resolution mechanism baked-in would go a long way toward making crypto a more viable alternative, especially if it delivered more effective justice than the credit card companies' stale policies and their opaque decision makers who don't really give a crap.

some arbitrary "justice algorithm" OTOH would "give a crap" ? I mean you are indicating an algorithmic system towards dispute resolution that just takes the bits from one party or the other, right? having "people" do it means you have authoritarian figures involved which I thought not having that was the whole point of crypto.

Re: Can the Visa-Mastercard duopoly be broken?

#554

Post by danieltanfh95 »

mchusma wrote: post #203
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…

I am an online merchant. The visa Mastercard fees are enormously high, so not. We are not "happy to pay it". The 3% is not to cover any consumer protection, that cost is born by the merchants. When a dispute is made by a customer, the merchant is assessed a fee, and almost always loses the dispute. The fees are so high that credit card companies give extremely high rewards back, which is in effect a regressive tax. I…

thats the chinese system basically and why the chinese online merchants ecosystem is much bigger

Re: Can the Visa-Mastercard duopoly be broken?

#555

Post by hnaccount_rng »

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…

Agreed that this is very seldom over here. But it's still the reason why I'm willing to shop that often online. It is _also_ the reason why online retailers are so "customer friendly". If I have a complaint with Amazon or Ebay I tell them I have a problem and I just expect them to sort it in my favour.

If you buy stuff from e.g. C&A or H&M (two clothing chains here) and pay by invoice (which is basically always a wire transfer you initialise), then there is always much more hassle. My ex-girlfriend had to have 3-letter discussion with them that they had to find the stuff she didn't want in their warehouse. If she'd just paid via credit card, this discussion wouldn't have lasted that long, because we could have had the bank take care of it. And I'm reasonably certain that ability influence their CS department's behaviour

Re: Can the Visa-Mastercard duopoly be broken?

#556

Post by npkarnik »

chrischen wrote: post #552
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…

Credit cards don't do jack shit for fraud protection. They simply market it as 0-fraud liability and the rest of the participating parties eat the costs (at least for online transactions and pre-chip days). Before there were chips, guess who got hit with the loss if fraud happened on a card? It was the merchant. For online transactions, merchants are still hit with the loss since the chip is not used. If you want act…

Think he meant that they protect the consumer

Re: Can the Visa-Mastercard duopoly be broken?

#558

Post by apeace »

Living in New York City, I've noticed that there are a whole lot of businesses that are either cash-only or card-only.

I always understood the cash-only ones. If you can get plenty of customers who are willing to pay in cash, why would you want to pay credit card fees?

The card-only ones were harder for me to understand, until I realized that handling cash costs money, too. Somebody needs to count it all at least once a day, if not more. Employees can steal it. Robbers can steal it. You need a safe. You need cash registers. You need to get the cash deposited in the bank, by paying someone to go do that. You need to maintain an inventory of smaller bills and coins to make change. You need to train people on all of this.

Even just the accounting costs might make up the 2-3 percent in fees. "Your register said you made $150 in cash that day, but the deposit that night was only $135." That's what you pay accountants to deal with, rather than just exporting from your Square account to Quickbooks or whatever.

I had this realization because I went to a new coffee shop that had opened up. It appeared to be owned and operated by just one lady, and she was really nice. So, as I normally do for the nice local business owners in my neighborhood, I got out some cash instead of a card, thinking it would benefit her business. But then she told me they were card-only and it dawned on me: she's just one lady running a store by herself, _of course_ she doesn't want to deal with cash.

So, I'm not sure the 2-3 percent fees are all that bad, though I could be convinced otherwise. Plenty of small business owners seem pretty happy just setting up a Square reader and not dealing with the headache of cash. I think there's a lot of value in that for them.

Re: Can the Visa-Mastercard duopoly be broken?

#559

Post by gsnedders »

moffkalast wrote: post #497
veeti wrote: post #316

Earlier quoted context omitted.

European debit cards such as Visa Debit or former Electron are practically no different from a credit card in making online payments. They work just fine. There are also credit + debit combination cards, which have two different numbers to use. They also let you choose which side to use on the payment terminal.

Yeah though those aren't true debit cards, at least not in the original sense. They're credit cards that work like debit cards that I mentioned now exist. Actual debit cards are issued by banks and only have the much longer account number on them.

How are they not true debit cards? They are issued by banks, directly debiting from an account. Sure, internally they piggyback on infrastructure originally intended for credit cards, but that's an implementation detail.

Maestro, given you mention it elsewhere, doesn't necessarily have longer payment card numbers than most credit cards (which are mostly 16, except for Amex which is mostly 15): it merely has a number made up of a number of different prefixes, and the final section is determined by the issuing bank… and several of these are variable length.

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