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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%

#241

Post by mindslight »

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.

The entire US banking system is built around debits, delayed settlement, and reversible transactions (as contrasted with bearer tokens, like cash). If a digital payment method doesn't support chargebacks/reversals, then it's not going to be exposed to consumers in its raw form. Rather it will have conventions layered on top of it that do support these things - like your bank contacting the receiving bank and saying "this transaction was unauthorized, please send the money back".

I haven't read too much on FedNow, but I would expect this will take the form where accounts that can receive payments assent to their bank reversing transactions for various reasons (and then using another non-reversible FedNow transaction to send the money back). So at the consumer level, chargebacks will still exist (for better and for worse).

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

#242

Post by rahimnathwani »

donmcronald wrote: post #101
wmf wrote: post #2

...in Canada

Where we also get surcharged +2% when using a credit card for USD purchases and no one seems to care what a massive ripoff that is.

The last time I checked, most UK banks add 2.75% to the Visa/MC wholesale rate.

Occasionally, a bank will create an account whose debit card has 0% FX loading, to help gain customers. Then, once they've gained a bunch of customers, they'll change the terms of the account.

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

#243

Post by jeffh »

Symbiote wrote: post #193
carlosjobim wrote: post #129

Earlier quoted context omitted.

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."

Curious what the justification is for 0.9375% (very precise number), given the report 0.3% interchange fee cap in EU noted in this thread? The vendor can charge you more than it costs them to accept the card?

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

#244

Post by cj »

sumedh wrote: post #205
devoutsalsa wrote: post #195

Earlier quoted context omitted.

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

> How should payment processing be funded if not per transaction? reply Taxes? Do you pay a toll to use each and every road for your car? Do something like what India has done.

The "road toll" may not be the best example.

At least in New York, you pay a toll every time you cross most bridges and every time you enter/exit a thruway (aka "freeway" in other parts of the country)

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

#245

Post by brewdad »

Semaphor wrote: post #163
Osiris wrote: post #141

Earlier quoted context omitted.

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.

Largely due to inertia, consumer psychology where lower sticker prices encourage more purchases even when consumers know the checkout price will be higher, and the fact that taxes can be different based on the type of item you are buying and the exact jurisdiction you are buying it. Two identical stores across the street from each other can have different tax rates if they are in different tax jurisdictions.

The stores have the info to calculate this, and do at checkout, so it's really the first two points mostly.

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

#246

Post by petre »

Symbiote wrote: post #114
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.

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.

Danish banks already have ridiculous comissions for wire transfers to other EU countries. Like 8€ for a 1500 DKK transfer.

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

#249

Post by matsemann »

carlosjobim wrote: post #228
nulbyte wrote: post #210

Earlier quoted context omitted.

> It really is not "incredibly expensive" to deal with cash. Yes, it is. Cash counters cost money to buy and operate. Storage and security has a cost, and even if it is not "expensive" in isolation, storing and securing cash doesn't happen in a vacuum. You really can't set prices to avoid running out of certain coins, because people buy different mixes of items that may or may not be taxable. And you are obliged to t…

It is not incredibly expensive. I've owned businesses that take cash and CC payments. Storage and security are completely dependent on location and other factors. Yes, a business that has a huge revenue might be interesting to robbers, making you have to invest in some security. But if all that huge revenue was paid with CCs you'd also have huge fees for that. If you keep running out of a certain coin, you can usuall…

It might be we're just from different parts of the world, hence our different views. But not in my entire life have I ever gotten paid any other way than a direct deposit to my bank account. To me getting paid in cash is completely alien. And since it's over a decade since I last used cash (at least..), I'm not even sure what I would do if someone gave me physical money. Like, I have no way of carrying it around comfortably. And most places I just use self checkout which is cashless.

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

#250

Post by petre »

carlosjobim wrote: post #240
Symbiote wrote: post #235

Earlier quoted context omitted.

Very few people pay the fee, most people pay with a debit card or cash. People trying to get air miles, cashback or similar have to pay the cost of that.

Visa electron/maestro are they debit cards now? Back in the day they were only for ATMs and very few businesses. Don't most people have the normal visa/mc debit cards there?

Yup. Visa Electron and Maestro are quite normal debit cards. I have one of those as well. Apart from renting cars you can pay for just about anything with it. Maestro has an ATM withdrawal fee even when you use it in the emitting bank's ATMs, which is a reason why I avoid it like the plague.
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