Wero isn’t even supported by all banks in the EU. :/
Europe's $24T Breakup with Visa and Mastercard Has Begun
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Re: Europe's $24T Breakup with Visa and Mastercard Has Begun
#42So Wero is not a credit card, but something more like Venmo? How is it supposed to replace Visa and Mastercard?
The concept of a physical card is obsolete. That North Americans and western Europeans for a good part still use them is just stickiness of the infrastructure, and habits.
Developing countries have mostly leapfrogged to total contactless payments.
In South Aast Asia, you typically scan a QR code and approve a payment from your own phone. Far less fraud as a result. Nobody is able to touch your card, you don't have one.
Europe likely identified they better make the jump.
Re: Europe's $24T Breakup with Visa and Mastercard Has Begun
#43Even putting aside issue of geopolitics, it's quite baffling to me that every country besides China and Russia are paying ~0.2% "sales tax" to corporate America.
Not 0.2% Visa: 1.3% to 2.3% Mastercard: 1.5% to 2.6% Mastercard: 2.3% to 3.5% Nothing precise as it depends on whether that's debit vs credit cards, and the type of card. Also volume related and what the bank may subsidize, or take on top.
The payment processing rates offered vary by country. It rarely goes above 1% in Germany unless you're really not shopping around or are really low volume.
A % of that also goes to the issuing bank*, not to MC/Visa, so I suspect the mentioned 0.2% is talking about what MC/Visa has as their cut.
*: That's also how banks can profitably offer things like cashback.
Re: Europe's $24T Breakup with Visa and Mastercard Has Begun
#44Earlier quoted context omitted.
Capital One just switched too.
https://investor.capitalone.com/news-releases/news-release-d... They didn't just switch. They purchased Discover. edit: added the "just"
Well, “just” as in “recently forced everyone to replace their cards” also works. My CapitalOne mastercard was deactivated January 14, even though it was still valid through 2030.
Re: Europe's $24T Breakup with Visa and Mastercard Has Begun
#45I always find it entertaining to hear people try to argue that what these companies do is soooooo difficult and that's why they're valuable. It's just multiple computers keeping a balance. It's not complicated. No, these companies keep themselves in power not because they've solved such a difficult problem that nobody else can, but because they have a moat which they protect. Time to do away with these foreign entiti…
> No, these companies keep themselves in power not because they've solved such a difficult problem that nobody else can, but because they have a moat which they protect.
I don't know that the problem is sophisticated, but it's certainly complex [1]. It's a bit of both in terms of complexity and defending a moat, which all businesses do, including, and especially European ones.
And companies like Visa, Mastercard, American Express, &c. arose initially from solving a real need. Before these companies came into existence when you traveled you'd have to take cash, or traveler's checks or some other nonsense. Today you can, at least as an American, just walk in to the subway in just about any country and tap to pay. Need a coffee at Mt. Fuji? Easy. Buying a bottle of Calvados in some remote area? Yea just tap to pay with your Mastercard.
> Time to do away with these foreign entities.
You'll never do that. Why? Because at a minimum you want American tourist dollars and Europe isn't going to start issuing European credit cards to Americans or other citizens around the world.
[1] Why is it complex? Well you have to deal with American and European financial regulations, KYC, &c. - you have to vet merchants, you have to run the infrastructure to process transactions, refunds, direct payments from bank accounts to pay for cards, and all of those things. Those are real, genuine business activities that are non-negotiable and while they may seem simple, in practice they are not at all simple.
Re: Europe's $24T Breakup with Visa and Mastercard Has Begun
#46I always find it entertaining to hear people try to argue that what these companies do is soooooo difficult and that's why they're valuable. It's just multiple computers keeping a balance. It's not complicated. No, these companies keep themselves in power not because they've solved such a difficult problem that nobody else can, but because they have a moat which they protect. Time to do away with these foreign entiti…
I think it's probably a little bit harder than you think with all the rules and regulations out there. I would highly encourage anybody who's remotely interested, listen to the Acquired podcast episode regarding Visa. It's actually quite fascinating how it was started. You may balk at the length, but the whole thing had me interested.
Re: Europe's $24T Breakup with Visa and Mastercard Has Begun
#47Earlier quoted context omitted.
Each individual detail isn't difficult, the moat is dealing with a huge, huge, pile of them. But most of the details are driven by laws and regulations: of the entity in charge of those things decides it doesn't want you to have a moat any more, you've got a problem. If there's one thing the EU really does have, it's the capacity to revise regulations.
Rather than a moat of details, it's first-mover advantage. Anyone can run a credit card network, but merchants and banks need to support them. Many others exist, but the issue is that they don't have widespread adoption. Solutions that work exist, which means the lesser supported alternative is not widely used, which again reduces reason for wider adoption... Regulation changes "why bother" to "oh crap".
jup. once this is built, if adoption is lacking, it's not hard to imagine how the EU could make it the standard payment option.
Re: Europe's $24T Breakup with Visa and Mastercard Has Begun
#48I always find it entertaining to hear people try to argue that what these companies do is soooooo difficult and that's why they're valuable. It's just multiple computers keeping a balance. It's not complicated. No, these companies keep themselves in power not because they've solved such a difficult problem that nobody else can, but because they have a moat which they protect. Time to do away with these foreign entiti…
Each individual detail isn't difficult, the moat is dealing with a huge, huge, pile of them. But most of the details are driven by laws and regulations: of the entity in charge of those things decides it doesn't want you to have a moat any more, you've got a problem. If there's one thing the EU really does have, it's the capacity to revise regulations.
> If there's one thing the EU really does have, it's the capacity to revise regulations.
This is the central power lever of the EU and one that is frequently underestimated.
European power projection doesn't work through tanks and aircraft carriers. It works with regulations, trade deals and economic incentives. Remember how a few years ago everyone was scrambling to get GDPR-compliant? That wasn't some random event. That was the EU projecting power.
Why do iPhones have USB-C now? European soft power.
Why are things like Champagne and Prosciutto di Parma protected brands that can only be sold if they're from the actual region? And I mean not just in Europe itself, but everywhere it has deals? Canada, Japan, India, China, Mercosur, etc etc? European soft power.
The EU is playing a different game from the other major players. Not one of brute force, but one of shifting the foundational rules of commerce in their favor. And they're very good at it.
Re: Europe's $24T Breakup with Visa and Mastercard Has Begun
#49Earlier quoted context omitted.
My wife found out her new card was Discover debit card right before her trip to France. Her bank sent her a new card unrequested. In an abundance of caution she activated the new card which automatically cancelled her debit Mastercard. Then when she landed in CDG found the new card didn't work anywhere.
This is what these peeps advocating for an "EU-based payment system" don't get, as they typically don't travel worldwide. VISA + Master just work. Have a debit plus credit for one each. (And no, Google / Apple pay won't do it, everyone who calls themselves a "hacker" should know that you too often can't even pay for transport using a rooted phone).
We do actually. The German Girocards were, until Maestro ceased to exist, often co-issued as Maestro + Girocard, and global acceptance was pretty good under the Mastercard network.
There are examples of other co-branded national payment systems out there (troy + Discover comes to mind).
If a European payment system (with cards, at a store) is to exist, then visa/mc will still want a piece of the pie by at least playing along to remain as a co-brand and taking their cuts from international payments.
Re: Europe's $24T Breakup with Visa and Mastercard Has Begun
#50Even putting aside issue of geopolitics, it's quite baffling to me that every country besides China and Russia are paying ~0.2% "sales tax" to corporate America.
Not 0.2% Visa: 1.3% to 2.3% Mastercard: 1.5% to 2.6% Mastercard: 2.3% to 3.5% Nothing precise as it depends on whether that's debit vs credit cards, and the type of card. Also volume related and what the bank may subsidize, or take on top.
Not in EU.
https://eur-lex.europa.eu/EN/legal-content/summary/fees-for-...
> Specifically, the regulation:
> caps interchange fees at 0.2% of the transaction value for consumer debit cards and at 0.3% for consumer credit cards;