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Can the Visa-Mastercard duopoly be broken?

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Re: Can the Visa-Mastercard duopoly be broken?

#591

Post by jsmith45 »

nobody9999 wrote: post #352
moffkalast wrote: post #251

Earlier quoted context omitted.

The thing about debit cards though, it's a different system and they don't work for online payments which makes them effectively useless. > People seem more wary of accruing debt in Europe; it's easy to lose control over your personal finances with a credit card. Well using credit means you're taking a loan, and subsequently paying interest on that loan even if it's just a month. Why would you pay interest on a loan…

>The thing about debit cards though, it's a different system and they don't work for online payments which makes them effectively useless. Huh? That hasn't been my experience. At all. I make online purchases nearly (yesterday I made two!) daily with my debit card with no problem at all. Perhaps that's an issue where you live. I'm in the US, so YMMV, I guess.

In the US, Online purchases with a debit card generally do not use the lower fee debit card networks, but instead use the credit card networks. Basically every debit card in the US is co-branded by one of the credit card companies, and can be processed by merchants as if it were a credit card.

The lower fee debit card networks operated by the interbank networks that run the ATM system (Pulse, NYCE, STAR, etc) do not seem to be available for online purchases.

So while you absolutely can pay with them online from the merchant's perspective it is a credit card, and only the issuing bank is treating them differently.

While Visa et al do know this is a debit card, and could could offer lower interchange fees, I'm not sure if they do, and they certainly don't lower it to the same level as the debit networks.

This may very well be different outside the US, as they may not be fully seperate networks in every country.

Re: Can the Visa-Mastercard duopoly be broken?

#592

Post by alexvoda »

dfxm12 wrote: post #567
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 gr…

Indeed, while I also often prefer to use a card, I believe it is essential to retain cash as legal tender.

Re: Can the Visa-Mastercard duopoly be broken?

#593

Post by theguyovrthere »

adrr wrote: post #115
tryptophan wrote: post #21

Earlier quoted context omitted.

Visa/Mastercard are looking very overvalued to me. When fednow comes out, I see very little reason for people to use those legacy options anymore. Its like the market is completely oblivious to the impending doom coming for these rent seekers. Every single app/store/site is gonna be begging you to enroll in fednow and will be offering 2-3% discounts/bonus points for any purchases made through it.

Debit card interchange for big bank debt cards is 0.05%. Sites/stores/apps don't offer debit cards discounts except gas stations. Big merchants offer their own payments/credit cards for up to 5% cash back, they aren't going to switch. FedNow will get adoption as a replacement for ACH / Check writing. Paying bills and getting paid. Instant deposits of paychecks will a big benefit to a lot people living paycheck to pay…

Zelle doesn't have a marketshare. Its owned by all the big banks and is designed to keep money in "the system". it's essentially digital cash.

Re: Can the Visa-Mastercard duopoly be broken?

#594

Post by theguyovrthere »

ProjectArcturis wrote: post #351
tryptophan wrote: post #21

Earlier quoted context omitted.

Visa/Mastercard are looking very overvalued to me. When fednow comes out, I see very little reason for people to use those legacy options anymore. Its like the market is completely oblivious to the impending doom coming for these rent seekers. Every single app/store/site is gonna be begging you to enroll in fednow and will be offering 2-3% discounts/bonus points for any purchases made through it.

Zelle, Venmo, and PayPal are the ones that should really be worried.

Zelle doesn't have a reason to worry. Zelle is essentially all the big banks and is designed to keep money in "the system". it's essentially digital cash.

Re: Can the Visa-Mastercard duopoly be broken?

#595

Post by KallDrexx »

PaulDavisThe1st wrote: post #146
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.

This does not negate the parent post at all. You're just describing another deficiency of the US banking system.

Can you explain how this is a deficiency of the US banking system?

According to stats I can find, the European central bank reported 1.03B Euros of fradulent transaction via cards back in 2019 (https://www.ecb.europa.eu/pub/cardfraud/html/ecb.cardfraudre...).

So the only way those fraudulent transactions won't hit your bank account is if your bank account is not directly tied to the card, which makes it a credit card by definition (because you are being given credit for purchases and not having to pay for it immediately).

So it seems like what the parent is saying is true outside the US as well?

Re: Can the Visa-Mastercard duopoly be broken?

#596

Post by Tijdreiziger »

moffkalast wrote: post #501
crote wrote: post #270

Earlier quoted context omitted.

Ehhh, no? Our debit cards are used for in-store payments, and literally every single bank allows you to use them for online payments too. We just developed systems which don't depend on handing random people a bunch of "secret" numbers and hoping they don't defraud you. For example, in The Netherlands *everyone* uses iDeal. Basically, the store does a 302 redirect on checkout to your bank, sending along the money owe…

> literally every single bank allows you to use them for online payments too Please tell me how the hell I should input a 19 digit debit maestro card into 16 digit credit card number slots. It even has letters. > iDeal Seems like it's only a Dutch thing according to the wiki.

iDEAL is from the Netherlands, but of course many countries have similar systems (Belgium: Bancontact, Germany: SOFORT, Poland: BLIK, Sweden: Swish, India: UPI, China: AliPay/WeChat Pay, etc., etc.)

Re: Can the Visa-Mastercard duopoly be broken?

#597

Post by buildsjets »

brewdad wrote: post #406
GekkePrutser wrote: post #298

Earlier quoted context omitted.

Same here in Europe. I've not signed my card for more than a decade because I've never been asked to provide a signature.

You at least have a PIN with your cc. In the US, it's signature or...nothing. Almost everywhere it's a tap or insert the chip. Still a mag stripe swipe in a few places but that's becoming more rare.

That's not quite true. I have a USA issued corporate card from Citibank which has a PIN. It only gets requested on rare occasions though, typically at automated terminals.

http://www.citi.com/chipandpin (note, pdf link)

Re: Can the Visa-Mastercard duopoly be broken?

#598

Post by nottorp »

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…

Possibly not all credit cards. We have the same in Romania - a lot of credit cards come with the option to pay in interest free (few installments) or sometimes interest bearing (more installments) installments. Sometimes at participating retailers, sometimes you just click on something in the bank's site.

Your spending limit is reduced by the whole amount but those interest free installments can be useful. Esp when you get 12-24 for stuff like TVs or furniture.

Other than that option, they act like normal credit cards. Pay next month, minimum payment, huge interest if you don't pay them in full, can contest any transaction, yadda yadda.

Re: Can the Visa-Mastercard duopoly be broken?

#599

Post by Brystephor »

toomuchtodo wrote: post #4

https://www.moderntreasury.com/learn/what-is-fednow > FedNow is an instant payment service for both individuals and businesses. Once launched, the initial transaction limit will be $25,000. This means that FedNow be more useful for small businesses and retail payment needs until it is widely adopted and the transaction limit grows. > In early 2022, the Federal Reserve released pricing and fee details for their real-t…

FedNow is only allowing depository institutions to participate and layers on top of them. The base price for a transfer might five cents, but I'd expect the bank to charge a fee on top of that. And if this scenario is a customer paying at a store, either online or not, there's almost certainly going to be another middle man (or multiple) between the merchant and the depository institution. Each of which will have its own set of fees, and one of which is likely to be a % of the transaction.

Basically you get a similar cost.

Re: Can the Visa-Mastercard duopoly be broken?

#600

Post by Silhouette »

Nursie wrote: post #443
Silhouette wrote: post #426

Earlier quoted context omitted.

The UK (again) has significant legal protections for credit that mean the credit card company is jointly liable for the debt in some circumstances And the advice for customers is often to buy mid-to-high value items using a credit card for this reason. If you order £10k of furniture for your new home from an online retailer that goes bust before delivery and you paid by credit card then you might well have a claim ag…

I'm not sure they do get such a raw deal for accepting card payments do they? Lots of (for example) food stalls in London were popping up as card-only businesses over the last few years, because it was easier than dealing with cash. The EU rules (which presumably still apply until actually repealed) capped the fees pretty effectively.

I'm not sure they do get such a raw deal for accepting card payments do they?

Typical terms for merchants accepting credit card payments are probably the most one-sided legal agreements I've ever seen.

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