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Ask HN: Do we need to pay billions in fees to Stripe, Block, PayPal and Visa/MC?

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Re: Ask HN: Do we need to pay billions in fees to Stripe, Block, PayPal and Visa/MC?

#91

Post by [deleted] »

konschubert wrote: post #75
oldprogrammer2 wrote: post #9

Stripe, Block, and PayPal each solved a massive pain point. PayPal provided a way to pay people and vendors without giving away your credit card number. Square made it easy to accept payment in person on a phone, without an extensive upfront underwriting experience and without expensive fixed monthly fees. Stripe did the same as Square, but for accepting online payments. Fraud and Risk come in many forms, and these p…

No. With 99% of my transactions I don’t care one bit about the ability to do chargebacks. I just went grocery shopping. VISA was involved and took a few percent. Why?? I got my groceries. I’m not going to do a chargeback because the salad was bad. Earlier, I bought something on Amazon. Again, VISA took a share. Why? In 15 years of shipping with Amazon they have always hinteres my returns.

[deleted]

Re: Ask HN: Do we need to pay billions in fees to Stripe, Block, PayPal and Visa/MC?

#92

Post by nyrikki »

Banks earn revenue from interchange fees on debit and credit card transactions.

Consumers don’t have any incentive to leave behind their current rewards programs.

Merchants want to accept any payments they can and/or don't have leverage to fight the fees that partially fund networks using rewards to compete for customers.

Perhaps something will arise from FedNow like efforts but as consumers don't see the inflated prices from those rewards programs I don't see any incentives to change.

Re: Ask HN: Do we need to pay billions in fees to Stripe, Block, PayPal and Visa/MC?

#94

Post by margalabargala »

Deathmax wrote: post #88
margalabargala wrote: post #66

Earlier quoted context omitted.

I understand that Europe is more secure with chip+pin, but in the US, debit cards do exactly what you describe. If fraud happens, you are out money until it is resolved. The key difference from cash, in the US, is the ability to abuse cards at a later date without the physical card. For someone to steal your wallet, they have to be colocated with you and can only steal as much as you're walking around with. As long a…

> As long as debit cards have a magnetic stripe and have their full number printed on them, and that information is useful, this problem remains. Which the EEA/UK has also (partially) solved by enforcing Strong Customer Authentication (SCA) that mandates that (most) transactions require MFA.

Yeah, Europe is ahead on this; I hedged my earlier statements heavily.

It's not a difficult technological problem to solve. A card's chip should be able to guarantee that the card is physically present for any transaction.

Obviously online payments would pose a problem, people would need to either own USB card chip readers or banks would need to do something new and special.

Re: Ask HN: Do we need to pay billions in fees to Stripe, Block, PayPal and Visa/MC?

#96

Post by devman0 »

BeetleB wrote: post #48
thesausageking wrote: post #39

Earlier quoted context omitted.

The challenger to these will solve for a different problem. Not every transaction needs complex fraud detection or being able for the customer do to chargebacks. For a 3% discount, would customers agree to use something that worked just like cash, where the transfer was instant and couldn't be undone? Then you don't have to worry about fraud, chargebacks, etc.

> For a 3% discount, It is fantasy to think they'd get a 3% discount. The goods in stores that take only cash do not tend to be cheaper than those that do. They know what people are willing to pay and will charge the price. If they see people are willing to pay $99 with a credit card, then they'll be willing to pay that with cash.

I think the issue here is who is paying the fee and where is the fee surfaced. A free market solution would work here, but it requires some regulating to create the transparency required.

Everyone pays their own credit card fee as a line item on the receipt, merchants are required to print it on the receipt. If customers actually had to pay their own fee's on each swipe you'd see a lot less people reaching for the Platinum card and instead for the no frills local bank credit card. You'd also see immense downward market pressure on swipe fees as now card issuers have to compete against each other.

Re: Ask HN: Do we need to pay billions in fees to Stripe, Block, PayPal and Visa/MC?

#97

Post by abakker »

dkasper wrote: post #87
welder wrote: post #84

Earlier quoted context omitted.

Nobody uses physical cards anymore... even my kids pay with their toy watch when playing restaurant Edit: Tap pay is ubiquitous in the EU

Absolutely not true. Some places still don’t even take tap to pay and still use chip.

Yes - for example, Home Depot does not take tap payments yet.

Re: Ask HN: Do we need to pay billions in fees to Stripe, Block, PayPal and Visa/MC?

#98

Post by oneplane »

konschubert wrote: post #90
carlosjobim wrote: post #83

Earlier quoted context omitted.

> I just went grocery shopping. VISA was involved and took a few percent. Why?? Because you paid with a VISA card instead of paying by cash. Hint: it says Visa on the card.

Why are you intentionally missing my point? Are you saying we should somehow all go back to cash and also use cash online?

What he's saying is that you (konschubert) involved VISA in the transaction. And since VISA is a paid service, you were charged.

As for why you involved them, that is the actual issue at hand, because it's a choice, not something that was forced upon you. But the choice isn't the first one that comes to mind; the choice was between protecting consumers or protecting corporations. And in the US, corporations are better protected than consumers. To level that protection, you (a consumer) have to involve someone else (a corporation) to gain any practical protection.

If that method of protection wasn't needed, you'd be paying using a cheaper (or free) method where you'd be protected differently (i.e. not based on the money going from A to B, but based on the fact that you are a consumer and should thus be protected).

You could also go back to the first choice that might come to mind: protection. If you are not in a society that protects consumers directly, but you also don't want to pay a corporate provider for that protection, you could opt to forgo that protection.

Re: Ask HN: Do we need to pay billions in fees to Stripe, Block, PayPal and Visa/MC?

#99

Post by konschubert »

oneplane wrote: post #98
konschubert wrote: post #90

Earlier quoted context omitted.

Why are you intentionally missing my point? Are you saying we should somehow all go back to cash and also use cash online?

What he's saying is that you (konschubert) involved VISA in the transaction. And since VISA is a paid service, you were charged. As for why you involved them, that is the actual issue at hand, because it's a choice, not something that was forced upon you. But the choice isn't the first one that comes to mind; the choice was between protecting consumers or protecting corporations. And in the US, corporations are bette…

And what I (konschubert) am saying is: I would like to have more choices, as a customer and especially as a merchant, so I don’t have to pay visa 3% next time.

And I think this means there is opportunity for disruption.

Re: Ask HN: Do we need to pay billions in fees to Stripe, Block, PayPal and Visa/MC?

#100

Post by devman0 »

konschubert wrote: post #89
kleinsch wrote: post #78

Earlier quoted context omitted.

You leave your credit card on the table at a coffee shop. A thief takes it and goes to the grocery store. You’re going to do a chargeback.

Yea I’m not proposing to replace low security credit cards with low security debit card this is a silly strawman. EDIT: I see the general problem of origination fraud. But that can be mitigated by imposing limits and requiring extra levels of authentication for bigger payments.

You said you don't want the ability to do chargebacks, but chargebacks solve two different problems: 1) origination fraud (i.e. someone not you originates a transaction from your account) and 2) merchant fraud (i.e. goods not as described/unsatisfactory/undelivered).

It's fine if you say, yeah I can do without #2, but realistically you cannot do without #1 in any digital payment scheme that will have wide acceptance so a chargeback mechanism is required.

The only settlement methods we have that do without both protections are cash, cashiers checks, and wires. Setting aside cash the other two are a pain in the ass to originate exactly because they are non reversible.

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