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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?

#561

Post by gsibble »

I actually designed software that could integrate with existing POS systems (the really hard part) that allowed for interchange free commerce using a card or Apple Pay integration.

I showed it to an investor. His only response was, "This is a very fast way to end up dead."

You don't fuck with monopolies that bring in hundreds of billions to trillions of dollars in profit a year. People get killed for way less.

On a secondary note, when I was working in payments, I once met the SVP of Payments for Wells Fargo. I got him drunk. He told me that when WF internally separated out their business units P&Ls, payments/interchange made up 64% of WF's total public Net Income.

Re: Can the Visa-Mastercard duopoly be broken?

#564

Post by throw__away7391 »

apeace wrote: post #558

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 onc…

The "cash only" businesses in NY are generally cheating on their taxes. A congressman was arrested a few years back for tax fraud on the profits from cash only businesses he owned in the city. His defense was that "this is a well-known common practice in the city".

Re: Can the Visa-Mastercard duopoly be broken?

#565

Post by conjecTech »

apeace wrote: post #558

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 onc…

This is a false dichotomy. Other countries have debit systems that solve all of the problems you outline and charge 0.1%.

Re: Can the Visa-Mastercard duopoly be broken?

#566

Post by akrymski »

mcv wrote: post #225
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?

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…

A gun to ones head is one universal way to drain any bank account or bitcoin wallet.

AFAIK none of the banks will reverse this activity, since technically you've authorised this transaction.

Re: Can the Visa-Mastercard duopoly be broken?

#567

Post by dfxm12 »

apeace wrote: post #558

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 onc…

The other side of this is that card only businesses de facto discriminate (not in an illegal way, of course) against people who don't have/can't get cards. Not being able to buy a cup of coffee from one particular coffee shop might not seem like a big deal, but it sends a signal as to who is/isn't wanted in the shop. Further, if it becomes a trend and all coffee shops go card only, spreading to other business like grocery stores, etc., then it starts to be a problem.

Re: Can the Visa-Mastercard duopoly be broken?

#568

Post by akrymski »

vimy wrote: post #432
Silhouette wrote: post #417

Earlier quoted context omitted.

That's still not true. Pull-based schemes are widely used across the SEPA region and in national schemes such as the UK's Direct Debits. A notorious celebrity in the UK famously revealed his bank details as a stunt to show that a large-scale data loss incident wasn't a big deal and he ended up making an unexpected payment to a healthcare charity shortly afterwards.

I don’t know about the UK but in my SEPA country only companies can create pull-based schemes and they can’t do it without authorization of the bank account owner. Mostly used for things like utility bills. So there’s zero danger in sharing your bank account number with someone.

1. It's easy to setup a company 2. There's no validation that the direct debit is being setup by the account owner

Re: Can the Visa-Mastercard duopoly be broken?

#569

Post by QuarterReptile »

nobody9999 wrote: post #338
pulisse wrote: post #295

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 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 no technical reason why bank accounts couldn't be similarly protected, but banks have thus far been successful in preventing such laws from being enacted. My bank's (Chase) policy limits debit card customer fraud losses to the same $50 that the law requires of credit cards. Not sure about other banks, but while I'm not sad that I have this protection, Chase's anti-fraud measures for debit cards (mostly progr…

My impression is that all banks are pretty miserable to deal with when you travel, though I imagine if you move out of consumer-grade junk, that improves. I have a bank account (Navy Federal Credit Union) that got locked out when I used a cashier's check to buy a car (despite repeated assurances that there was a note in my account explaining the transaction in advance.) Unfortunately, their customer service is just a notch better than Google, with hold times routinely exceeding 3 hours, and lines periodically going dead; consequently, I'm going on 7 months without access to my accounts.

Re: Can the Visa-Mastercard duopoly be broken?

#570

Post by apeace »

throw__away7391 wrote: post #564
apeace wrote: post #558

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 onc…

The "cash only" businesses in NY are generally cheating on their taxes. A congressman was arrested a few years back for tax fraud on the profits from cash only businesses he owned in the city. His defense was that "this is a well-known common practice in the city".

I don't doubt that for a second :)
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