Hacker News Board Hacker News, browsed like a classic message board
Live data from Hacker News

Can the Visa-Mastercard duopoly be broken?

economist.com

Post reply on HN
Print view View original

661–670 of 703 posts

Re: Can the Visa-Mastercard duopoly be broken?

#661

Post by com2kid »

eek2121 wrote: post #431
brewdad wrote: post #406

Earlier quoted context omitted.

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.

You described the US (regarding not signing, you are mistaken about the signature aspect). Most places stopped accepting signatures several years ago. Card readers are almost always 'insert' except in the very rare case where a card doesn't have a chip. Tap and pay is not common, however tap and pay is more common than signing something (in the US companies have been resisting tap and pay due to higher transactional…

Every store I have been to in the last few months is tap to pay. It really seems to have exploded in popularity in 2022.

Re: Can the Visa-Mastercard duopoly be broken?

#662

Post by cuteboy19 »

msravi wrote: post #660

In India, the duopoly is already broken by UPI (Universal Payments Interface). UPI provides zero-cost transfers and mobile payments between linked bank accounts and every little streetcorner store and sidewalk vendor accepts UPI payments. Also 2FA using SMS is required and enabled by default. You can pay by scanning a QR-code, or a mobile number, or a UPI ID. There's also an effort to allow "scanning" an audio-signal…

It's actually broken by RuPay cards (Rupee+Pay not Russia+Pay) which is a direct alternative to visa/MasterCard. It has like 30% market share already.

Few years back the central bank realised that depending on a foreign company for such a basic thing might not be the best idea. And they were proven right with the Russia/SWIFT episode.

Interestingly both Visa and MasterCard are currently lobbying (bribing) with the US government against RuPay

Re: Can the Visa-Mastercard duopoly be broken?

#663

Post by ephimetheus »

martinald wrote: post #637
ephimetheus wrote: post #467

Earlier quoted context omitted.

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.

I've never got it either. I do have to say though that the German society is super focussed on cash as a thing so I wouldn't be surprised if the associated cost of it were lower there.

It doesn't make sense to me however that the economics are ostensibly so different between e.g. Germany and France, where in the latter basically even small shops don't care. Either it's something to do with taxes like you said, or German shop's margins are razor thin.

Re: Can the Visa-Mastercard duopoly be broken?

#664

Post by cuteboy19 »

csomar wrote: post #159
Enginerrrd wrote: post #96

Earlier quoted context omitted.

>I'm no fan of crypto, but the one place where I can see real utility for blockchain is as a backend settlement service for banks. So... what does the crypto provide there that a simple authenticated communication protocol with a few redundant centralized servers doesn't?

A blockchain will allow all these operators to transact safely. It's really just more secure because it's open (otherwise very quickly compromised). And blockchain tech has shown to be reliable when it comes to up-time and security (if you keep it simple).

But they are talking about permissioned blockchain which are essentially clearinghouses.

Re: Can the Visa-Mastercard duopoly be broken?

#665

Post by anticensor »

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.

If you want e-commerce use then get a regular Mastercard Debit. Maestro cards require physical presence of the card and electronic interaction between the card and the POS.

Re: Can the Visa-Mastercard duopoly be broken?

#666

Post by nomay »

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…

Paypal charges the seller $8 fee for every dispute, $16 if the dispute rate higher than 1.5%.

And $2500 dispute fee for each order deemed against their Acceptable Use Policy.

Re: Can the Visa-Mastercard duopoly be broken?

#667

Post by imtringued »

sgerenser wrote: post #655
ClumsyPilot wrote: post #386

Earlier quoted context omitted.

So a credit card is doable, but a credit account is beyong the capabilities of human civilisation. Its like breaking the light barrier

What would the difference be between this hypothetical “credit account” with payment card attached to it and a credit card?

Credit cards are effectively a second bank account in the former and in the latter "credit card" and bank account are merged as one.

Re: Can the Visa-Mastercard duopoly be broken?

#668

Post by account42 »

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…

> If consumers had to push payment every month or year to continue subscriptions (instead of having it automatically debited), then churn rates would skyrocket and modern SaaS multiples would crash - taking company valuations with it.

Recurring bank transfers are not that hard to setup and would probably be even easier by now if credit cards weren't available. If your argument is that this would give users better oversight of their recurring payments and the ability to cancel ahead of time without restrictions then I fail to see how this is an argument for the current credit card system.

Re: Can the Visa-Mastercard duopoly be broken?

#669

Post by magicalhippo »

988747 wrote: post #650
notsapiensatall wrote: post #418

Earlier quoted context omitted.

There is a functional difference in how credit/debit cards work, though. With credit cards, you get an invoice with fraudulent charges at the end of the month. You can choose not to pay those charges, citing fraud. The bank will clear the charges if they agree. With debit cards, the money is withdrawn directly from your account. You can report the unauthorized withdrawal, and the bank will reimburse you if they agree…

With credit cards the disputed charges will still decrease your credit limit, no? So the functional difference is much smaller than you think.

And unlike a credit card, it's easy to vary the risk/limit with a debit card. Just keep the main funds on a separate, non-card accound, and transfer to the debit card account as needed.

I usually keep around $200 on my debit card, which means I lose at most $200. This way I also get a sense of my spending in terms of how often I have to transfer.

If I need to pay for more, I just transfer before paying. Takes me about 2 seconds with an SMS or through the bank app.

Re: Can the Visa-Mastercard duopoly be broken?

#670

Post by papito »

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.

United States citizens are the only ones who still have to SIGN their credit card receipts, including when they travel.

We are behind the times even with our own "hack" invention. Remarkable.

Post reply on HN