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Visa and Mastercard: The global payment duopoly (2024)

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Re: Visa and Mastercard: The global payment duopoly (2024)

#61

Post by dkga »

kyrra wrote: post #34
mzitelli wrote: post #17

Brazil central bank introduced Pix a few years ago. It took over the country as the public basic infrastructure for money transfer. Totally free and instantaneous transactions between people and companies, available to all banks. Then, just last week, the US presidency launched an investigation considering Pix an unfair trade practice against the US. Actions like that may show the current direction of the US governme…

My understanding is that Pix took over because the Brazilian gov did transfer payments during covid and the (only?) way to get those payments was via Pix. So it forced everyone to start using it. And once people had more familiarity with Pix, merchants started pushing for it because it charges ACH level fees. The chargeback system (MED) is only so-so right now, but expected to get better. There is a lot to like about…

No, the Central Bank of Brazil did not force any person to start using Pix.

Also, care to elaborate why you think the spec is complicated and hard to implement?

Re: Visa and Mastercard: The global payment duopoly (2024)

#62

Post by dkga »

mzitelli wrote: post #17

Brazil central bank introduced Pix a few years ago. It took over the country as the public basic infrastructure for money transfer. Totally free and instantaneous transactions between people and companies, available to all banks. Then, just last week, the US presidency launched an investigation considering Pix an unfair trade practice against the US. Actions like that may show the current direction of the US governme…

By the way, for those that want more context on Pix a good place to start is this BIS Bulletin: https://www.bis.org/publ/bisbull52.pdf

Re: Visa and Mastercard: The global payment duopoly (2024)

#63

Post by twoodfin »

rprend wrote: post #30

Speaking as someone who tried (and failed) to build a competitor, merchants don’t actually care about the fees. We built a mobile payment system using bank transfer rails (ACH debits and FedNow credits) for ecom platforms. QR payments, just like AliPay, but for the US. We studied past failures at this same idea, and targeted specifically high ticket items (jewelry, luxury), because the fees are a bigger problem, and…

I suspect high-end merchants get that the financially well-off potential customers who hold high-fee rewards cards expect to be able to use them. Worth the 3% on a high-margin purchase to attract the customer vs. annoying them.

The fee ends up split between the cardholder, bank, Visa/MC, maybe the card brand sponsor… everyone’s happy.

Re: Visa and Mastercard: The global payment duopoly (2024)

#64

Post by vimy »

TMWNN wrote: post #55
Detrytus wrote: post #52

Earlier quoted context omitted.

That's just your bank giving back some (but not all) of those 2+% interchange fees. Basically, in EU you have low fees, so credit cards are boring, they offer almost zero perks (because there's no money to finance those). No one really cares about what brand of card they get, only about their credit limit. In the US you are charged high fees on every purchase, and then the bank uses your own money to bribe you, or en…

>That's just your bank giving back some (but not all) of those 2% interchange fees. On the contrary, for someone like me who pays off my balances each month, if I get 2% back for every transaction, I am breaking even on those fees if assuming that I pay 100% of the fees, which of course isn't true; the merchant pays some of that. So really, I come out slightly ahead. For something like the Amex I mentioned with its 5…

For standard credit cards in EU it’s mandatory to pay the full balance every month. And it doesn’t cost anything, there are no interest rates. Not sure how much banks profit on it, if there’s even a profit.

I think most banks only offer if because customers needed credit cards to order stuff on the internet. Before that they were very rare here.

Edit: I meant the credit is free but I pay like € 2 / month to have my card. So maybe that’s their profit.

Re: Visa and Mastercard: The global payment duopoly (2024)

#65

Post by TMWNN »

Detrytus wrote: post #59
TMWNN wrote: post #55

Earlier quoted context omitted.

>That's just your bank giving back some (but not all) of those 2% interchange fees. On the contrary, for someone like me who pays off my balances each month, if I get 2% back for every transaction, I am breaking even on those fees if assuming that I pay 100% of the fees, which of course isn't true; the merchant pays some of that. So really, I come out slightly ahead. For something like the Amex I mentioned with its 5…

> So EU credit card companies don't do this? No, as I said, they don't because of the interchange fees limit: they simply don't have money to finance any perks. Sometimes you get travel insurance, with the card that charges 200 EUR annual fee, sometimes you get some rewards program, where you collect the points, but those points are typically valued at 0.0001 cent, so no one really bothers earning them. Credit cards…

> Sometimes you get travel insurance, with the card that charges 200 EUR annual fee

Why would someone pay EUR200 each year for that credit card, then? Why does it exist at all? The only US credit cards I know of that have fees have fees because of their (huge) benefits.

You, of course, pretended to not see my pointing out your laughable math regarding fees versus cashback even though I said up front that I get 2-5% back.

Re: Visa and Mastercard: The global payment duopoly (2024)

#66

Post by skissane »

greenavocado wrote: post #5
everyone wrote: post #3

The fucked up thing is how they are enforcing archaic puritan ideals on the whole world. Acting as self appointed global censors. (Eg. not allowing adult games on Steam or Itch.io) The most confusing thing for me is why. I have read a few theories, but nothing convincing. What could be a strong enough motivator to do such a bizarre thing? Also we need governments to keep them in line. We cant have private corps actin…

This is the wrong question to ask. The right question to ask is what is preventing other payment processors from seamlessly getting in front of the customer, at every retail location, and online? If other payment processors existed and were allowed to flourish, we would not give a damn if these two blocked 90% of transaction types. Instead, something is suffocating innovation and personal freedom.

> This is the wrong question to ask. The right question to ask is what is preventing other payment processors from seamlessly getting in front of the customer, at every retail location, and online?

Here in Australia, most places accept UnionPay as well as Visa/Mastercard - but I don’t know if any local banks offer UnionPay cards, [0] I think this facility is really targeted at visitors from mainland China. And if a cafe takes UnionPay, that’s just because the cafe’s bank accepts it, and why would the cafe refuse if the bank allows it? A lot of places refuse to take Amex even though their bank does due to its high fees, but I don’t believe UnionPay has that issue. A lot of places take JCB, although that’s not as widely accepted as UnionPay is-in Australia, JCB is handled by Amex, so a lot of merchants will refuse JCB (even if their bank accepts it) due to the same concern about fees. Diners Club used to be accepted in Australia too, until they pulled out of the Australian market last year (I think overseas Diners Club cards are still accepted by some places as Discover, but few in Australia have ever heard of Discover)

I used to have an Amex credit card issued by my bank, and I used to use it all the time-they’d kick back some of the extra merchant fee they got as extra frequent flyer points/miles - but Australian banks stopped issuing Amex when a regulatory change in 2017 significantly reduced how much money the issuing bank could make from them

I don’t believe the situation for online retailers is hugely different-if your bank supports UnionPay/Amex/JCB for in-person transactions, they likely do for online transactions too

[0] Bank of China’s Australian subsidiary apparently does issue UnionPay cards to Australian residents, but I doubt they’d get many customers except for immigrants from China-most Australians would never even consider applying, and they’ve made no attempt to market it to the average person

Re: Visa and Mastercard: The global payment duopoly (2024)

#67

Post by bigDinosaur »

benced wrote: post #44
pavlov wrote: post #13

The credit card duopoly is another instance where the EU has done a good job with regulation, but everyone just takes it for granted until they’re reminded how much worse the rest of the world has it. In the EU, card payment fees are capped at 0.2% for debit cards and 0.3% for credit cards. In the US, these interchange fees are about 2%. US businesses pay over $100 billion annually in these fees to card networks. If…

People always cite the first-order benefits of this regulation but don't look into anything else. To be clear, I haven't either but what I would look for is: - are real prices cheaper for consumers? - is economic activity higher or lower (i.e. maybe credit cards encourage purchases?) - does making credit cards a less lucrative business lower credit card penetration? - is lowering credit card penetration, particularly…

They're set at whatever the payment networks can get away with. There's nothing that says that's good for anyone else, although it is very good for Mastercard and Visa.

Re: Visa and Mastercard: The global payment duopoly (2024)

#68

Post by Detrytus »

TMWNN wrote: post #65
Detrytus wrote: post #59

Earlier quoted context omitted.

> So EU credit card companies don't do this? No, as I said, they don't because of the interchange fees limit: they simply don't have money to finance any perks. Sometimes you get travel insurance, with the card that charges 200 EUR annual fee, sometimes you get some rewards program, where you collect the points, but those points are typically valued at 0.0001 cent, so no one really bothers earning them. Credit cards…

> Sometimes you get travel insurance, with the card that charges 200 EUR annual fee Why would someone pay EUR200 each year for that credit card, then? Why does it exist at all? The only US credit cards I know of that have fees have fees because of their (huge) benefits. You, of course, pretended to not see my pointing out your laughable math regarding fees versus cashback even though I said up front that I get 2-5% b…

The math must to check out from the bank perspective, there's no way around that, no bank will accept losing money.

If your credit card gives you 2% cash back on everything then obviously interchange fees charged must be just a tiny bit higher. [1]

As for 5% cashback on Amazon purchases (or similar promos) that's a completely different business model: the card is co-branded by Amazon, so it is Amazon that eats the cost of cashback, hoping that they will make up for that from your increased spending. That's why cashbacks higher than 2% are always on specific categories, or even specific stores/product brands - because bank needs a partner to eat the cost.

[1] https://www.wellsfargo.com/biz/merchant/payment-processing-p...

Re: Visa and Mastercard: The global payment duopoly (2024)

#70

Post by man4 »

mzitelli wrote: post #17

Brazil central bank introduced Pix a few years ago. It took over the country as the public basic infrastructure for money transfer. Totally free and instantaneous transactions between people and companies, available to all banks. Then, just last week, the US presidency launched an investigation considering Pix an unfair trade practice against the US. Actions like that may show the current direction of the US governme…

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