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

71–80 of 304 posts

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

#71

Post by withinboredom »

bombcar wrote: post #64
mdasen wrote: post #31

Earlier quoted context omitted.

> 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.

That is usually against the card-processing agreement. If you want to have fun, you can report them to Visa/MC and watch that go away within a few days.

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

#72

Post by Pxtl »

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.

Why? If the merchant is paying an extra 1-2% for your purchase in cc transaction fees, why should they be expected to eat the cost? Why should your service be subsidized by people whose transactions don't have that overhead?

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

#73

Post by withinboredom »

55555 wrote: post #59
godelski wrote: post #42

Earlier quoted context omitted.

> Nationalize a universal payment interface like india did > a very corrupt, bureaucratic place with billions of people did it. You're not making a great sell here... you're just saying that this is a thing that a corrupt country does and therefor others should.

Are you American? Have you lived abroad? Here in Thailand (a "poor" "third-world" country) all individuals and businesses can send instant money transfers with no fees at all 24/7. It's an incredible system. I think the truth is that it has less to do with corruption and more to do with the fact that people who implement technology first end up later with, on average, worse technology. (If you build the first rail sy…

The US banking system is lightyears behind the rest of the world in banking, where they still use paper checks and transfers take multiple days. I show my family (who still lives in the US) my banking app and they gawk as if it were some magical thing they'd never even imagined. With a tap of a button in my bank account, I can split a restaurant bill in however many slices I want. Restaurants don't even split bills here (like they do in the US), someone just pays the full amount and splits it in the bank account.

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

#74

Post by TeeWEE »

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…

This is also a good summary written by the ex CTO of Adyen:

https://tebi.co/blog/of-cards-and-costs/

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

#75

Post by namdnay »

bombcar wrote: post #64
mdasen wrote: post #31

Earlier quoted context omitted.

> 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.

I was in Manhattan earlier in the year and a lot of restaurants had that written at the bottom of the menu!

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

#76

Post by e63f67dd-065b »

adrr wrote: post #35
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…

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

I'm not objecting to credit cards and promoting cash instead -- I'll happily support a total cash ban (quite an unpopular opinion around these circles, I believe, but that's a story for another time). I'm objecting to the cost of 2-300bps on credit cards, when it is trivially shown that they can be 30-50bps (Alipay, EU caps, etc) and everything will work just fine, just without 2% cashback.

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

#77

Post by matsemann »

Waterluvian wrote: post #4

> That means on a $100 purchase, if a customer pays with a credit card, the retailer will get at least $99, where they previously would have kept as little as $97 in some cases. I absolutely love the heavy lifting “as little as” is doing here. > Businesses with annual Visa sales volume below $300,000 will qualify for the lower fee, as will those who do less than $175,000 from MasterCard. That’s revenue, not profit. S…

What I often find surprising is people or shops complaining about the fees, and then trying to use cash everywhere. Dealing with cash is so incredible expensive, just because you don't see the fee doesn't mean it's not there.

Like my parents had to deal a lot with cash before. That meant thataafter every shift, you had to spend time counting it, and whole processes around that. Safe storage, extra security, extra threat of robbing. Then have to spend time taking the money to a bank, and purchasing rolls of change.

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

#78

Post by danpalmer »

wanttocomment wrote: post #30
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…

Studies show you buy more with a credit card than cash. You think you're saving 1-3% but you would easily save that with slightly more conservative spending. It's also worth mentioning the real business is analyzing the consumer data you give them for pennies.

I'd love to see the distribution on this. My bet is that most people don't spend more and a minority spend a lot more.

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

#79

Post by adrr »

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.

Most debit cards cost the merchant 0.05% for interchange and provide consumers with fraud protection.

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

#80

Post by danpalmer »

Waterluvian wrote: post #4

> That means on a $100 purchase, if a customer pays with a credit card, the retailer will get at least $99, where they previously would have kept as little as $97 in some cases. I absolutely love the heavy lifting “as little as” is doing here. > Businesses with annual Visa sales volume below $300,000 will qualify for the lower fee, as will those who do less than $175,000 from MasterCard. That’s revenue, not profit. S…

> where they previously would have kept as little as $97 in some cases

Or lower. A number of years ago I worked in an Apple reseller, and there were Apple products that wouldn't break even when the customer paid with AMEX, and that's only based on margin/card fees, not counting all other business costs.

IIRC AMEX could reach as high as 5% and Apple's wholesale discount could be as low as 5%. Possibly the worst two companies to be stuck between as a retailer!

Post reply on HN