Visa and Mastercard agree to lower average credit card interchange fee below 1% • Hacker News Board

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

#261

Post by computing » Fri, May 19, 2023, 4:30 PM UTC

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.

Let's be 100% clear on this - nobody is forcing the merchants into accepting credit cards. In fact, many don't. They do fine as cash-only businesses.

The hard economic reality is that accepting credit cards increases your sales, presumably enough to make the interchange fees worth it.

At last, Afterpay, Affirm etc. charge 600 bps (6%) interchange for their 4 split payments offer. Again, no one forces merchants to accept these payment methods, but the ones that do clearly see the benefit to the top line resulting from higher conversions.

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

#262

Post by beojan » Fri, May 19, 2023, 4:35 PM UTC

qwytw wrote: post #257

Semaphor wrote: post #163

Earlier quoted context omitted.

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

Because sales taxes are ussually set by the local jurisdiction. So it could 10.25% in one place, 9.75% in the next town 8.750% and 8.975% if you drive for another 15-20 minutes. Imagine if you run a business, have multiple locations and want to buy a TV/Billboard/etc. ad with the price how would that work? You'd also need to make different price stickers, won't be able to print the price on the packaging etc.

You could set one tax included price, so the actual revenue you get would vary slightly in different places. Costs already vary based on location so I don't see a huge issue there.

Of course this does change the incentives for localities setting their sales tax, and they might be inclined to set them higher if the cost isn't borne by local residents. I don't know if that's a bad thing, if that money improves local services and / or lowers other taxes.

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

#263

Post by mixmastamyk » Fri, May 19, 2023, 4:54 PM UTC

matsemann wrote: post #226

yccs27 wrote: post #148

Earlier quoted context omitted.

Most shops accept both cash and credit, and the costs of dealing with cash don‘t go down by much just because half your customers pay cashless.

As for my parent, it's 99% cashless. Might be one person a week or so using cash. So can now skip most of the time waste of dealing with cash. But Norway has had a high card usage for decades, so this might not be as prevalent other places. (I lost my wallet ~2 years ago, including my cards. Everywhere is contactless, so I had no issues just using my watch/phone to pay everywhere I went, until I now recently finally…

Complete loss of privacy. Personally went back to mostly cash, although it’s not clear how long it will be available.

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

#264

Post by mrguyorama » Fri, May 19, 2023, 5:08 PM UTC

qwytw wrote: post #256

ivan_gammel wrote: post #154

Earlier quoted context omitted.

Consumer behavior in different countries is different and depends on many factors - culture, mindset, local customs and habits, structure of taxes and regulations etc. American system will not be convenient for Germans, for example (I personally do not understand how it can be convenient).

> personally do not understand how it can be convenient It can be very convenient for retailers since sales can vary in different counties let alone states: https://en.wikipedia.org/wiki/Sales_taxes_in_the_United_Stat... just try to imagine what a mess it would be if any advertisement, price sticker etc. would have to show the full price.

It wouldn't be difficult at all. Price stickers are printed/managed in store often enough. Any company that allows you to purchase online already had to deal with differing sales tax, and everything is owned by like one company right now anyway so they already have systems in place to deal with differing tax rules in different states.

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

#265

Post by arcticbull » Fri, May 19, 2023, 5:19 PM UTC

bombcar wrote: post #239

arcticbull wrote: post #86

Earlier quoted context omitted.

It almost certainly isn't. Nobody's taking FedNow at point of sale.

Nobody is doing anything with FedNow yet because it's not out. But if it works it will grow, just like in the EU where they have similar things and they're used.

When I said "nobody is taking FedNow" I meant nobody is going to be taking FedNow at the point of sale after launch in July. It'll work just fine, but it enables things like Cash App, Zelle and Venmo to avoid using debit rails. It's quite unlikely it'll actually exist at cash registers. Out of curiosity which product are you referring to in the EU? To my knowledge they just use Visa/MC Debit or local debit schemes at point of sale.

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

#266

Post by ivan_gammel » Fri, May 19, 2023, 5:24 PM UTC

qwytw wrote: post #256

ivan_gammel wrote: post #154

Earlier quoted context omitted.

Consumer behavior in different countries is different and depends on many factors - culture, mindset, local customs and habits, structure of taxes and regulations etc. American system will not be convenient for Germans, for example (I personally do not understand how it can be convenient).

> personally do not understand how it can be convenient It can be very convenient for retailers since sales can vary in different counties let alone states: https://en.wikipedia.org/wiki/Sales_taxes_in_the_United_Stat... just try to imagine what a mess it would be if any advertisement, price sticker etc. would have to show the full price.

I see it as a mess in the tax system being projected to customers. I do not understand the choice of taxpayers to have such system.

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

#267

Post by Symbiote » Fri, May 19, 2023, 5:35 PM UTC

jeffh wrote: post #243

Symbiote wrote: post #193

Earlier quoted context omitted.

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?

I'm not sure. I don't have a personal credit card to check.

I know there are extra fees for business/corporate credit cards, and these are specifically excluded from the EU cap. (The cap was for consumer protection, so business transactions aren't regulated.)

Foreign (non-EU) fees are also not part of the EU cap, as there's no way to control those.

It could be poor wording on the sticker, or it might be including the other fees. The 0.3% is just Visa/MasterCard's fee, there's also the fee from the card processor — HN is familiar with Stripe, but there are many companies offering this.

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

#268

Post by bombcar » Fri, May 19, 2023, 5:58 PM UTC

arcticbull wrote: post #265

bombcar wrote: post #239

Earlier quoted context omitted.

Nobody is doing anything with FedNow yet because it's not out. But if it works it will grow, just like in the EU where they have similar things and they're used.

When I said "nobody is taking FedNow" I meant nobody is going to be taking FedNow at the point of sale after launch in July. It'll work just fine, but it enables things like Cash App, Zelle and Venmo to avoid using debit rails. It's quite unlikely it'll actually exist at cash registers. Out of curiosity which product are you referring to in the EU? To my knowledge they just use Visa/MC Debit or local debit schemes at…

Lots of larger purchases use the equivalent of what would be in the USA a routing number and a bank account number.

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

#269

Post by hackernewds » Fri, May 19, 2023, 6:59 PM UTC

matsemann wrote: post #77

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 thr…

Most people do not have or tie monetary costs to their time. Only to goods

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

#270

Post by godelski » Fri, May 19, 2023, 7:01 PM UTC

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…

Read my comment again but remove any reference to countries or even credit systems. My comment would apply to any thing that the parent was arguing for. The logic is "corrupt and evil country did x. Therefor anyone can, and should, also do x." The sentence correlates "x" with corruption. If "x" isn't corrupted, then the argument should be different. But I'm just saying that the argument, presented in that way, is unconvincing.