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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?

#211

Post by tonymet »

Consumers have an easy solution: pay with cash or check. Sadly, cash buyers will still pay the fees indirectly through price increases.

The government could do some easy deregulation here and force vendors to expose the transaction fees to the consumer. Similar to gas stations : pay 3% more for Visa than cash. This will have a big impact on big ticket items like appliances.

Truth is: businesses and government agencies like the cards. 3% of sales is less than what is stolen from the register. State & federal agencies like CC because the records can be subpoenaed.

So consumers, payment cards, vendors, governments all like these cards -- there's very little to discourage their use.

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

#212

Post by jahabrewer »

konschubert wrote: post #192
warkdarrior wrote: post #166

Earlier quoted context omitted.

Some things to keep in mind from the merchant perspective. A merchant will care about cost per transaction, cost of fraud/chargebacks, acceptance by customers, and integration into their backend systems. Once you have these solved, merchants will flock to you.

I’m a merchant myself, I sell e-paper calendars. Last year I paid about 4% of my revenue for transaction costs in various shapes. That’s very roughly 20% of my margin. (!) Some of these are hidden as very bad, but non-optional, currency conversions. The hard one here is acceptance by customers. No merchant wants to clutter their checkout page with a button that nobody understands. Or worse, have customers get trapped…

Another way to think about this is in terms of how many marginal customers you get from being able to accept payments over the Web. 4% starts sounding less bad

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

#213

Post by jahabrewer »

abeppu wrote: post #111

You're naming these companies that facilitate money moving in specific ways, but you could also zoom out and include a lot of banking which either serves to move money between parties or across space or time. So I guess one question is: as credit unions are to banks, what missing organization type needs to exist as a counterpoint to payment services, which could return excess to owner-users?

I'm a credit union member and... idk I've become disillusioned. Their products and rates are consistently worse than national banks. I won't feel like I'm sharing in anything. The execs seem to get good comp though.

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

#214

Post by carlosjobim »

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?

If you find businesses who are willing to let you pay by other methods (assuming you are unwilling to use both cash and credit cards), you can give them your business. Businesses respond to consumer demand.

If they don't trust you enough to give you credit without a guarantor like Visa or Mastercard, then I don't think there is any way for you to force them.

There are businesses who let you purchase stuff online by bank wire.

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

#215

Post by throwway_278314 »

Nextgrid wrote: post #120
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…

A lot of the fraud hinges on the fact that all you need to drain an account is a static card number. A lot of hacks are subsequently piled on top of that to try and make it harder (SCA/3D Secure, captchas, etc), and a lot of busywork is spent tidying up the consequences of that (chargeback handling, etc). You could eliminate a lot of the fraud by moving off a mostly-static identifier to merchant, amount and time-limi…

I'm not sure you can eliminate fraud. You can shift it around, but not eliminate it.

Sweden thought going cashless would reduce crime. Nope, crime increased.

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

#216

Post by rafram »

immibis wrote: post #162
Nextgrid wrote: post #120

Earlier quoted context omitted.

A lot of the fraud hinges on the fact that all you need to drain an account is a static card number. A lot of hacks are subsequently piled on top of that to try and make it harder (SCA/3D Secure, captchas, etc), and a lot of busywork is spent tidying up the consequences of that (chargeback handling, etc). You could eliminate a lot of the fraud by moving off a mostly-static identifier to merchant, amount and time-limi…

I often make medium-to-large purchases using SEPA bank transfer. The merchant gives me a bank account number, a random or serialized reference code, and a week to make payment. I go to my bank, and send the money to the bank account, inputting the same reference code. Once it arrives (usually within the day or the next morning) the thing is paid. This works for most online purchases that are not urgent and support th…

That’s fair, but paying by credit card lets you:

- Keep the money in the bank (and earn interest on it) for another month or so

- Contest fraudulent charges or payments for goods or services that are never delivered

- Earn travel rewards (I know, those have systemic downsides)

- Pay any business in essentially any country in any currency with no fee for you and a low fee for the business

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

#217

Post by crazygringo »

konschubert wrote: post #194
crazygringo wrote: post #132

Earlier quoted context omitted.

> 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. Which are exactly the kinds of things credit cards do, but it can't be perfect so they still suffer losses, so they still have to charge a percentage. (Of course a lot of the percentage can go to rewards programs, so we're talking about the percentage o…

In the US you can take money from a credit card by just using the that’s plainly written on it. That’s not what I would call making an effort at origination fraud prevention.

Believe it or not, they make a huge effort at fraud prevention. Because it takes away from their profits.

However there are both historical and convenience reasons at play here. It was a big transition to move to chips, for example.

So your assertion that they're not making an effort at fraud prevention is just completely untrue.

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

#218

Post by trompetenaccoun »

cedws wrote: post #33

This is why I was excited about Libra (later renamed to Diem.) which was Meta's feeless digital currency that was scrapped. It could have been a Western WeChat Pay, which charges no fees up to 200 RMB ~= 20 GBP. I don't see why they should get to shave a slice off of every transaction. It takes relatively little upkeep and they rake in huge profits. The fees nudge businesses to use cash (well, to avoid tax too, somet…

It was not just "scrapped", they were basically forbidden from going ahead by regulators protecting the incumbents.

It's the same problem all cryptocurrency projects face. They allowed Bitcoin because Bitcoin is basically useless for payments, it's too slow and fees are way too expensive. Though Ethereum recently slipping through the cracks may disrupt the payments industry in a big way. Coinbase and Circle are already working on bringing direct stablecoin payment options to customers/merchants with USDC and other tokens afaik. Which would also be more decentralized than Facebook's Diem. Not sure how many people would trust corporate money, an open public ledger is preferable of course.

https://www.ft.com/content/a88fb591-72d5-4b6b-bb5d-223adfb89...

https://www.dw.com/en/facebook-backed-cryptocurrency-sold-am...

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

#219

Post by kinakomochidayo »

jakeinsdca wrote: post #6

[dead]

I don't think anybody would enjoy the UX with Lightning where payments regularly fail. And if you're asking them to use custodial services, that just introduces additional risk. Not to mention the fluctuation in value of BTC.

Better to use USDC on Base or Ethereum instead. or maybe USDT on Tron like many people around the world do.

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

#220

Post by kinakomochidayo »

NotYourLawyer wrote: post #146

Just use Bitcoin! lol

should just use USDC on Base instead - no high transaction fees like with Bitcoin, no crappy UX with Lightning, cheap transactions, free bridging, and no conversion fees for USDC -> USD unlike BTC -> USD.
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