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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%

#191

Post by refurb »

withinboredom wrote: post #106
hyperbovine wrote: post #83

Earlier quoted context omitted.

Nope, this is completely (laws vary by state) legal as of ten years ago. https://www.lawpay.com/about/blog/credit-card-surcharge-rule...

Legal, yes, you're not going to go to jail for it. However, in accordance with the contract they signed to get access to the card network… they probably are not allowed to do this. Each card issuer has a dedicated form to report this activity.

You realize that contracts can't contain illegal clauses right? They aren't enforceable in any court.

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

#192

Post by refurb »

jiggywiggy wrote: post #97
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…

Still don't understand why US is so obsessed with credit cards. Debit is much more easy and straight forward, it's the standard in EU. Most of us only have cc to purchase stuff from US sites. Why such a complicated solution? Looks like a bank product.

Debit is actually terrible and I've never used it. If there is an error, it your money that is gone until it's fixed.

Slightly related, I never allow direct debit from my bank account for things like utilities. It's blanket permission to take money they think they are owed. A friend had a problem with his electricity, the public utility came out, said the meter was tampered with, replaced it and charged him $1000 right from his account.

Of course they were wrong. He got the money back, two months later.

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

#193

Post by Symbiote »

carlosjobim wrote: post #129
Symbiote wrote: post #114

Earlier quoted context omitted.

In Denmark, the additional fees charged for foreign (non-EU I think) or corporate cards are passed on to the customer. The price says 100DKK, but they pay 101.50DKK or whatever it is.

That's probably not the card fees, but the currency exchange.

Here's a sticker from a self checkout at a large supermarket (Føtex): https://imgur.com/a/w9sg1ey

It says (roughly) "Payment cards without fee: All Danish and foreign debit cards"

"Payment cards with fee: 0.9375% Danish issued; 1.75% foreign issued."

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

#194

Post by hocuspocus »

lvl102 wrote: post #176

It’s 2023 and we are still letting these companies take money from EVERY SINGLE TRANSACTION. This is the single greatest open scam in the world.

They provide a service. Handling payments is never free. It's up to governments to do their job and cap fees where the market cannot do it on its own.

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

#195

Post by devoutsalsa »

lvl102 wrote: post #176

It’s 2023 and we are still letting these companies take money from EVERY SINGLE TRANSACTION. This is the single greatest open scam in the world.

I get what you're saying, but those systems don't pay for themselves. How should payment processing be funded if not per transaction?

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

#196

Post by Symbiote »

robertlagrant wrote: post #177
nicoburns wrote: post #166

Earlier quoted context omitted.

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.

Seems crazy not to, just because of the risk of tapping a debit card that gets cloned. I only use a debit card to (occasionally) draw cash.

Debit cards are 48% of all payments in the UK, and credit cards 8%.

Cash is 15%, the rest are various types of bank transfer. Note this is all transactions, online and in-person, including things like subscription renewals.

(How can a debit card be cloned, anyway? I'm not aware of any case of this, only a possible problem in the USA where data is 'cloned' onto a magstripe card.)

https://www.ukfinance.org.uk/system/files/2022-08/UKF%20Paym...

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

#197

Post by withinboredom »

refurb wrote: post #191
withinboredom wrote: post #106

Earlier quoted context omitted.

Legal, yes, you're not going to go to jail for it. However, in accordance with the contract they signed to get access to the card network… they probably are not allowed to do this. Each card issuer has a dedicated form to report this activity.

You realize that contracts can't contain illegal clauses right? They aren't enforceable in any court.

I thought we already established that it wasn't illegal? You can, however, create contracts that restrict your abilities or for things that are perfectly legal. For example, we can sign a contract that you're no longer aloud to walk, or buy candy. That's a legally enforcable contract.

In this case the contract is that 1) you tell them you're doing this and 2) that it is capped to a certain amount and 3) you are visibly doing it and the customer is properly informed.

These are all pretty reasonable contractual terms, IMHO.

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

#198

Post by Symbiote »

netheril96 wrote: post #178
55555 wrote: post #57

Earlier quoted context omitted.

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.

In China most payments cannot be reversed. By contrast, the security of payment methods are much more stringent in China. I was surprised when I first learnt that you could spend money online with a VISA card by only card number, expiration date and a 3(!) digit CVV. Those are hardly secure and printed out on the card that anyone can see. Then the US merchants have so many rules about fraud detection but all of them…

Many of the large American companies involved in payments (Visa, MasterCard, Stripe, Square, PayPal) also operate in Europe, and implement the modern security practices required here. 2FA for credit/debit payments made online, for example, and chip payments since... 2004 or something.

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

#199

Post by Broken_Hippo »

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.

That's because it has never been that way in the US, or at least not during my lifetime (I'm over 40). Having the fees be added on wouldn't be much different from an increase in sales tax or having your phone bill be more because the quoted prices don't include tax. Cash already has surprise totals.

Convenience isn't even a factor.

Compared to other places, where the price is what you pay (in most cases). You would be adding inconvenience and a little uncertainty to one form of payment. Americans would switch too, if this were the case.

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

#200

Post by eliseumds »

e63f67dd-065b wrote: post #12
arcticbull wrote: post #6

Visa and Mastercard don't keep much of interchange at all and never have. The vast majority is paid to issuing banks to pay for loan origination, fraud and, most significantly, to return in the form of cash back or points. These networks charge 0.2% for debit and 0.3% for credit in Europe as per regulation, you just don't get rewards there. Kinda sounds like they're just going to squeeze issuing banks. Cash back and…

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…

You're correct about Pix, it averages at 0.22% [1]. It's free for personal transactions and some card/POS machines have zeroed the fees when you scan a Pix QR code to pay at small shops. It's currently the most popular payment method in Brazil (credit card is second) [2]. It's slower than just tapping my Apple Watch to pay, but tap-to-pay with Pix is in development and I can't wait for it. Installments are also coming. Our Banco Central is really pushing it and the big banks are not liking it, at all. Good.

A nice side-effect of it all is that many credit cards are offering great rewards without any annual fee. I get year-round access to VIP lounges at any airport here, car/travel insurance AND cashback/miles for $0, it's a very different scenario from say 5 years ago.

[1] https://www.infomoney.com.br/minhas-financas/pix-e-mais-bara...

[2] https://febrabantech.febraban.org.br/temas/meios-de-pagament...

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