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

Visa and Mastercard agree to lower average credit card interchange fee below 1%

ca.news.yahoo.com

Post reply on HN
Print view View original

61–70 of 304 posts

Re: Visa and Mastercard agree to lower average credit card interchange fee below 1%

#61

Post by 55555 »

ulfw wrote: post #55
kondro wrote: post #18

You don't want to see the Australian interchange rates… https://www.visa.com.au/about-visa/interchange.html

Australia is the only country I've ever been at that heavily discourages using a credit card because almost every single shop charges you 1-2% MORE for using a credit card, including international hotel chains, restaurants etc. THAT is something that should be outlawed.

That should not be outlawed. The merchant is getting 1-2% less, and so they should be able to charge 1-2% more. Using a credit card at my shop is not a fundamental human right. It's much more arguable that I have the right to choose my pricing though. If you want to pay in gold I'd charge a fee for that also.

Re: Visa and Mastercard agree to lower average credit card interchange fee below 1%

#62

Post by e63f67dd-065b »

AmericanChopper wrote: post #37
anonymouskimmer wrote: post #28

Earlier quoted context omitted.

I think you misread the point GP was making. The poor-poor don't have credit cards. They have cash and debit cards. They pay the same as we do at most[1] merchants, despite credit card transactions nominally costing the merchant more money than cash or debit transactions. Most merchants budget the cost of credit card fees into their regular prices that all people pay regardless of method of payment. [1] - https://www…

> The existence of credit cards is basically an automatic 2-3% inflation on prices. If you want to draw this conclusion you’d have to calculate the cost of the alternative. What would the impact on prices be if there were no electronic payments? What would the impact on prices be if every bank had to implement its own electronic payment system with every merchant? The credit card system integrates a huge portion of t…

The world you described exists, and it’s called Alipay (in China), TNG (in Malaysia), Pix (Brazil), etc (that's why I listed them in my original comment). Alipay and Wechatpay is the standard in China, a country with a population triple that of the US, and only charges 55-60bps, a quarter that of the US. So yes, I do believe that we can gain efficiency by switching.

Also note that interchange is capped in the EU at 30bps, and they seem to do just fine without 2% cashback on every purchase. One might start to think that we can do with something similar here in the US.

Re: Visa and Mastercard agree to lower average credit card interchange fee below 1%

#63

Post by pgeorgi »

ulfw wrote: post #55
kondro wrote: post #18

You don't want to see the Australian interchange rates… https://www.visa.com.au/about-visa/interchange.html

Australia is the only country I've ever been at that heavily discourages using a credit card because almost every single shop charges you 1-2% MORE for using a credit card, including international hotel chains, restaurants etc. THAT is something that should be outlawed.

It's nice to see the cost of credit card processing being limited to credit card users, instead of everybody having to pay it through increased baseline prices with some "premium" credit card holders getting it back through "rebates".

Re: Visa and Mastercard agree to lower average credit card interchange fee below 1%

#64

Post by bombcar »

mdasen wrote: post #31
e63f67dd-065b wrote: post #12

Earlier quoted context omitted.

These numbers are not public, but the grapevine is that visa/mastercard keeps about a third of all interchange. Credit card rewards are a regressive tax on the poor -- literally, only those like us here on HN with good credit can get 2% cashback on everything, the rest who pay with debit/cash effectively subsidise our 2% discount. I enjoy my 2% cashback, but really would rather see a world where, like the EU, interch…

> I'm weary of government intervention in capping prices, but I'm not sure what's the alternative here Instead of capping prices, you could simply require any fees to be paid by the cardholder. Combine that with a standard for payment processing so that lots of companies could compete for payment processing and fees would drop really fast. If someone is using a POS terminal like Toast or Square, it should be trivial…

> Instead of capping prices, you could simply require any fees to be paid by the cardholder.

This has begun. Many restaurants near me have a credit card fee, as does at least one car repair place.

No fee of paying with cash/debit.

Re: Visa and Mastercard agree to lower average credit card interchange fee below 1%

#65

Post by bombcar »

55555 wrote: post #57
ramraj07 wrote: post #41

Earlier quoted context omitted.

Nationalize a universal payment interface like india did. India, a very corrupt, bureaucratic place with billions of people did it. There’s no excuse but lobbying. Credit card rewards are evil. They incentivize crafty behavior to secure miles or whatever and shaft normal people who just want to live life and get what’s equitable without playing shenanigans. I’d rather live in a world where when you pay for a coffee,…

FedNow is launching soon. It won't support chargebacks or reversals, which merchants would love, so they may offer it as a payment method (if this is possible). Consumers will then be able to save a few % at the expense losing their ability to contest the transaction. Unless credit card agreements mandate the price be the same regardless of payment method, or something.

I suspect fednow is why visa and MC are moving now to reduce fees.

I can’t wait.

Re: Visa and Mastercard agree to lower average credit card interchange fee below 1%

#66

Post by dumpsterdiver »

ramraj07 wrote: post #41
adrr wrote: post #35

Earlier quoted context omitted.

Cash is more expensive to take as a payment method than interchange unless you’re cheating on taxes.

Nationalize a universal payment interface like india did. India, a very corrupt, bureaucratic place with billions of people did it. There’s no excuse but lobbying. Credit card rewards are evil. They incentivize crafty behavior to secure miles or whatever and shaft normal people who just want to live life and get what’s equitable without playing shenanigans. I’d rather live in a world where when you pay for a coffee,…

Instead of air mileage, just give us the coffee. We can't afford the time off, but we can drink that damn coffee.

Re: Visa and Mastercard agree to lower average credit card interchange fee below 1%

#67

Post by snovv_crash »

ulfw wrote: post #55
kondro wrote: post #18

You don't want to see the Australian interchange rates… https://www.visa.com.au/about-visa/interchange.html

Australia is the only country I've ever been at that heavily discourages using a credit card because almost every single shop charges you 1-2% MORE for using a credit card, including international hotel chains, restaurants etc. THAT is something that should be outlawed.

Pricing transparency is a good thing. It makes sure incentives for everyone are correctly aligned.

Re: Visa and Mastercard agree to lower average credit card interchange fee below 1%

#68

Post by noobermin »

RheingoldRiver wrote: post #24

For anyone reading this thread and not knowing what the terms being tossed around mean, but curious, there was recently a thread here [0] with some resources that you can check out to understand the space a bit. I devoured two of the three books [1], [2] in about 4 days total, they're really easy to get through, definitely recommend. [0] https://news.ycombinator.com/item?id=35714145 [1] https://www.amazon.com/Field-G…

As usual, thank hn for being educational (occasionally in a good way)

Re: Visa and Mastercard agree to lower average credit card interchange fee below 1%

#69

Post by thomasahle »

AmericanChopper wrote: post #37
anonymouskimmer wrote: post #28

Earlier quoted context omitted.

I think you misread the point GP was making. The poor-poor don't have credit cards. They have cash and debit cards. They pay the same as we do at most[1] merchants, despite credit card transactions nominally costing the merchant more money than cash or debit transactions. Most merchants budget the cost of credit card fees into their regular prices that all people pay regardless of method of payment. [1] - https://www…

> The existence of credit cards is basically an automatic 2-3% inflation on prices. If you want to draw this conclusion you’d have to calculate the cost of the alternative. What would the impact on prices be if there were no electronic payments? What would the impact on prices be if every bank had to implement its own electronic payment system with every merchant? The credit card system integrates a huge portion of t…

> If you want to draw this conclusion you’d have to calculate the cost of the alternative. What would the impact on prices be if there were no electronic payments?

The alternative is credit or debit cards with a tenth of the fees and no cashback, just like in every other country.

Re: Visa and Mastercard agree to lower average credit card interchange fee below 1%

#70

Post by hamandcheese »

AmericanChopper wrote: post #37
anonymouskimmer wrote: post #28

Earlier quoted context omitted.

I think you misread the point GP was making. The poor-poor don't have credit cards. They have cash and debit cards. They pay the same as we do at most[1] merchants, despite credit card transactions nominally costing the merchant more money than cash or debit transactions. Most merchants budget the cost of credit card fees into their regular prices that all people pay regardless of method of payment. [1] - https://www…

> The existence of credit cards is basically an automatic 2-3% inflation on prices. If you want to draw this conclusion you’d have to calculate the cost of the alternative. What would the impact on prices be if there were no electronic payments? What would the impact on prices be if every bank had to implement its own electronic payment system with every merchant? The credit card system integrates a huge portion of t…

The alternative is not "no credit cards", it is "credit cards, but with lower interchange fees"
Post reply on HN