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

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

#161

Post by ivan_gammel »

jkaplowitz wrote: post #133
ivan_gammel wrote: post #43

Earlier quoted context omitted.

You won’t sell this idea in Europe. Here the price tag for anything is the full amount you pay - including all commissions and taxes. People use debit cards, the paid amount is immediately deducted from bank account. If customers are forced to calculate how much they actually will spend on each transaction, they will instantly switch back to cash.

The price tag in Europe already has at least one exception in some countries like Germany: bottles and cans subject to the deposit system usually have the deposit added on top of the listed price. Of course, one can recover the deposit by returning the bottle or can to a suitable store, but at the point of sale it is usually added on top of the listed. (The price listing often acknowledges this addition explicitly, w…

Yes, deposit is different: it is fixed absolute amount on a single specific product, it is refundable, so in the end your expense will be the price without it. Also it is much higher than any transaction costs. Transaction fees on the other side do require some calculation effort and you have to remember the percentage.

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

#162

Post by Semaphor »

jkaplowitz wrote: post #133
ivan_gammel wrote: post #43

Earlier quoted context omitted.

You won’t sell this idea in Europe. Here the price tag for anything is the full amount you pay - including all commissions and taxes. People use debit cards, the paid amount is immediately deducted from bank account. If customers are forced to calculate how much they actually will spend on each transaction, they will instantly switch back to cash.

The price tag in Europe already has at least one exception in some countries like Germany: bottles and cans subject to the deposit system usually have the deposit added on top of the listed price. Of course, one can recover the deposit by returning the bottle or can to a suitable store, but at the point of sale it is usually added on top of the listed. (The price listing often acknowledges this addition explicitly, w…

But a) those prices are straightforward, 0.08, 0.15 and 0.25 are the options depending on the type of bottle, b) as you said, you get the money back, and most importantly c) the deposit money is included on the price sticker.

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

#163

Post by Semaphor »

Osiris wrote: post #141
ivan_gammel wrote: post #43

Earlier quoted context omitted.

You won’t sell this idea in Europe. Here the price tag for anything is the full amount you pay - including all commissions and taxes. People use debit cards, the paid amount is immediately deducted from bank account. If customers are forced to calculate how much they actually will spend on each transaction, they will instantly switch back to cash.

That’s not the case on the US (tax is added after the fact) and there hasn’t been a massive switch to cash. Convenience is a powerful thing.

And people in Europe are usually puzzled why you’d have such a crazy system, yes.

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

#164

Post by Reason077 »

eru wrote: post #137
Reason077 wrote: post #127

Earlier quoted context omitted.

Competition drives prices down in a fair market, but the credit card business is an oligopoly - with huge regulatory and structural barriers to entry. That is, despite Visa and MasterCard’s enormous profits, there is little chance of new players entering the market and increasing competition. Regulation is warranted in monopoly/oligopoly situations. Either by changing the rules to favour/promote increased competition…

Here in Asia we have alternatives to Visa and Mastercard popping up. Merchants are typically happy to take them, because their fees are lower. > Regulation is warranted in monopoly/oligopoly situations. Either by changing the rules to favour/promote increased competition, or, as the EU has done here, by capping the fees which they can charge. I suspect you might want to look into lightening regulations, so that upsta…

Right. That’s exactly what I mean by “changing the rules to promote increased competition”.

This is unlikely to happen in the US, however, where market-dominant corporations have huge lobbying power and can ensure the rules are written in their favour, and any potential upstarts drowned in a sea of red tape.

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

#165

Post by withinboredom »

alwayslikethis wrote: post #152
withinboredom wrote: post #71

Earlier quoted context omitted.

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.

Can't this by circumvented by giving cash customers with a discount? It's like how things are sometimes offered interest-free, but a discount is given if you pay for it outright.

I believe so, but it could also vary state-to-state.

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

#166

Post by nicoburns »

robertlagrant wrote: post #157
dr_dshiv wrote: post #155

Earlier quoted context omitted.

Part of the cost of a tax is cognitive. That’s why VAT is a great tax. Build it into the systems. Instead, private credit cards are built into the system. That makes no sense to me. The US system of credit cards does very little for economic stability or growth. It has clear harms to the vulnerable and it hardly benefits the economically stable. Instead, there should be a system of frictionless debit payment. Governm…

> Instead, there should be a system of frictionless debit payment Here in the UK we have frictionless debit payments and we all use credit cards. Credit cards have a safety net in case of fraud. Much better.

Do we all use credit cards? I know people who use credit cards specifically for large purchases. I know very few people who use one regularly for groceries, etc.

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

#167

Post by carlmr »

badcppdev wrote: post #153
xhendrick_neues wrote: post #126

Earlier quoted context omitted.

The sales tax surcharge does seem awkward On the other hand, that's probably why sales tax is around 5%? whereas VAT is 20%+

There's a great map of the US on Wikipedia showing the Sales Tax by County ( https://en.wikipedia.org/wiki/Sales_taxes_in_the_United_Stat... ) Sales Tax ranges from 0% through to 12%

But still OP's point stands. If the VAT was more visible, people might be less accepting of it, like with credit card fees.

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

#168

Post by AmericanChopper »

kalleboo wrote: post #122
AmericanChopper wrote: post #93

Earlier quoted context omitted.

I use several such systems, including TNG, and they have all of the same fee structures as credit cards. The TNG cash back program: https://fintechnews.my/33848/e-wallets-malaysia/fave-offers-... The TNG loyalty program: https://www.touchngo.com.my/promotion/redeem-your-points/ The TNG cardholder fees: https://www.touchngo.com.my/policies/touch-n-go-card-fees-an... There’s also merchant fees (which are confidential).…

This is the relevant number here: https://merchantsupport.tngdigital.com.my/hc/en-us/articles/... Merchants are charged 0.5%. Compared to 2-3% in the US credit card scheme.

That’s a promo rate, and only available to certain merchants. Wait until it becomes profitable in “3 to 4 years”. The only real opportunity these systems have to increase efficiency is to not offer consumer fraud protections, which is obviously of questionable value to the consumers.

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

#169

Post by arcticbull »

withinboredom wrote: post #165
alwayslikethis wrote: post #152

Earlier quoted context omitted.

Can't this by circumvented by giving cash customers with a discount? It's like how things are sometimes offered interest-free, but a discount is given if you pay for it outright.

I believe so, but it could also vary state-to-state.

Cash discounting was blanket permitted in all 50 states under Durbin. [1] It also de facto invalidated any clause in a merchant agreement that precluded this practice.

[1] https://www.atlantafed.org/blogs/take-on-payments/2018/04/30...

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

#170

Post by uf00lme »

The market is still ripe for disruption, this is a defensive move based on fear and the eventually that the era of free money for these players is coming to an end. These middle man are going to be cut out sooner than even they expected, since every smart phone is a PoS device e.g., the move with iPhones in Australia https://www.smartcompany.com.au/industries/retail/apple-ipho...
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