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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?

#631

Post by snotrockets »

justinpombrio wrote: post #549
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…

And this isn't a hypothetical concern. People have sent money through Zelle to the wrong person, either through scam or by mis-typing a phone number, and Zelle support has been very clear that there's no way to get your money back. There was a previous HN post about it.

Regulation E should apply here, limiting liability to $50 (https://www.federalreserve.gov/supervisionreg/regecg.htm), regardless of what Zelle puts in their user agreeement or the training materials for their support personal. Don't even bother with Zelle: call your bank directly.

Re: Can the Visa-Mastercard duopoly be broken?

#632

Post by jjav »

nirimda wrote: post #493
jjav wrote: post #459

Earlier quoted context omitted.

> Extra hassle of interaction with a second company other than your bank Nearly every (probably every) bank issues credit cards (they'll ultimately be Visa or MC, but cobranded by your bank) if you want to get everything from one place. > Fees. The whole point of credit cards - for the CC companies of course - is fees. What fees? There are no fees. In fact there are nearly always cash back (or points, or something) t…

> What fees? There are no fees. I guess that depends on the legal system. In some places the merchant frequently passes the fees on to the customer (and any contract between the payment network and the merchant which prohibits it is invalid to that extent by law). Then you need to consider the rules of the place you're in and decide which card to pull out, and you probably have your default card on Apple/Google/Samsu…

> In some places the merchant frequently passes the fees on to the customer

In the US that is exceedingly rare. The only exceptions I've seen are the government and a few discount gas stations.

But, you're right, in the end it's important to always be aware of the payment rules of each place and optimize accordingly.

> I think it's also common for a credit card to have an annual fee that probably doesn't apply to a debit card.

Most normal credit cards (at least in the US) have no annual fee. A good one is the Citi Double Cash card, no annual fee and unlimited 2% back on everything.

The premium cards have fees, those are rarely worth it unless you travel so much that you can take advantage of all the discounts.

Re: Can the Visa-Mastercard duopoly be broken?

#633

Post by snotrockets »

hnburnsy wrote: post #550
nullfield wrote: post #479

Earlier quoted context omitted.

Given who owns Zelle and what they do, and that they’re not a bank, I really want zero to do with them. They’re sus AF, IMO, and I’m just waiting for there to be a serious incident.

>Zelle is a United States–based digital payments network owned by Early Warning Services, LLC, a private financial services company owned by the banks Bank of America, Truist, Capital One, JPMorgan Chase, PNC Bank, U.S. Bank, and Wells Fargo. So it is owned by the banks, but the banks that own and offer it don't give any protections.

It is governed by regulation E (https://www.federalreserve.gov/supervisionreg/regecg.htm), and Zelle admits as much on their website (https://www.zellepay.com/financial-education/pay-it-safe/und...).

They do try very hard to suggest this doesn't apply. This isn't true in practice, but I'm certain many would give up without trying.

Re: Can the Visa-Mastercard duopoly be broken?

#634

Post by Sprocklem »

OJFord wrote: post #463
PaulDavisThe1st wrote: post #150

Earlier quoted context omitted.

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.

Any idea what it's like in Canada, similar to the US?

Canada has e-transfers between any two bank accounts via Interac, although some banks do charge a small fee when sending from some types of accounts. Interac debit can also be used pervasively at POS terminals, although credit cards (both Visa and MasterCard) are widely used. I haven't seen a cheque used in any capacity in over a decade.

Edit: Both debit and credit card payments use chip-and-pin or tap everywhere, and have for a well over a decade.

Re: Can the Visa-Mastercard duopoly be broken?

#635

Post by Shindi »

gsibble wrote: post #561

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 s…

> payments/interchange made up 64% of WF's total public Net Income.

This is wrong and not possible. WF is a public company so you can look up their financials: https://finance.yahoo.com/quote/WFC/financials/

You can see that interest revenue > non interest revenue always so there is no way interchange can account for 64% of their revenue.

Re: Can the Visa-Mastercard duopoly be broken?

#636

Post by throw149102 »

nradov wrote: post #624
dfxm12 wrote: post #567

Earlier quoted context omitted.

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…

Who can't get a card? Anyone should be able to get a prepaid debit card, although it is a bit of extra hassle. Those work on the Visa / MasterCard networks, and are accepted by any business (except perhaps certain hotels and online services).

The homeless probably have struggles getting a card.

Re: Can the Visa-Mastercard duopoly be broken?

#637

Post by martinald »

ephimetheus wrote: post #467
martinald wrote: post #233

Earlier quoted context omitted.

Well from my perspective Germany is incredibly backwards with payment infrastructure (apparently has got somewhat better during covid). I've been many many times and so many places do not accept any debit/credit card, only cash. It is incredibly annoying especially at restaurants and you want to pay for a group. Youre right about the rest but in the US card acceptance is very very high (same in the UK, Nordics, etc).…

That’s due to societal reasons though not really technical ones. In many cases it’s the businesses not being willing to pay the extra fees at all, regardless of how low they are. This seems to indeed have started to rapidly change with covid.

Cash has a load of fees of its own though - loss, theft, peoople giving wrong change out, transport costs (and the risk it entails), bank fees to accept etc. I believe the cost of handling cash is estimated at 1-2%. I know my business bank accounts all charge 0.5%-1% to pay cash in.

The only way it makes sense is if you are evading tax, as you'll happily pay 1-2% in cash losses to save 20, 30, 40%+ in taxes.

Re: Can the Visa-Mastercard duopoly be broken?

#638

Post by [deleted] »

Brystephor wrote: post #599
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…

[deleted]

Re: Can the Visa-Mastercard duopoly be broken?

#639

Post by saghm »

nradov wrote: post #626
saghm wrote: post #614

Earlier quoted context omitted.

To be fair, writing on currency doesn't necessarily have to be legally binding. The bills also say "in god we trust", and yet I'm free to not trust in god and there are no legal consequences.

You're missing the point. Under US federal law, if I owe you a $100 debt and I hand you $100 in cash paper money then I have settled the debt. You cannot then sue me, demanding to be paid via Visa or PayPal or whatever. But this applies to debts only , not purchases.

I think you're missing my point! I'm not saying that the law doesn't actually require this; I'm just saying that there's nothing in general saying that something printed on every bill has to be true. In this case, it happens to be, but saying that it's printed on the bill isn't what proves it.

Re: Can the Visa-Mastercard duopoly be broken?

#640

Post by saghm »

selectodude wrote: post #618
saghm wrote: post #614

Earlier quoted context omitted.

To be fair, writing on currency doesn't necessarily have to be legally binding. The bills also say "in god we trust", and yet I'm free to not trust in god and there are no legal consequences.

Eh, "This note is legal tender for all debts, public and private" doesn't leave a lot of room for nuance.

My point is that the writing on the bill isn't what actually makes the law enforceable. If Congress passed a law that required the mints to print the words "this is a flamingo" on every dollar bill, it wouldn't make it true. The fact that cash is required to be accepted is because of the law passed, not because the magic words on the bill say so.
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