What do Visa and Mastercard do? An intro to card networks • Hacker News Board

Re: What do Visa and Mastercard do? An intro to card networks

#61

Post by mlefer » Wed, Sep 09, 2026, 7:20 PM UTC

collabs wrote: post #15

In my opinion, the only solution is everyone (individuals as well as corporations) gets a direct account with the federal reserve as long as you can associate a taxpayer identification with the account. Using it is voluntary but it is free of cost, paid for by taxes, and moving money to and from accounts is free of cost. Depositors would get the same overnight interest rate that banks do, and this interest is added e…

A few years ago congress had a nice solution via a market mechanisms, have sufficiently large banks be required to have their cards support at least 2 card networks, via which the merchant may at at swipe time decide which network to run against. Unfortunately like any good idea, it died in congress.

Re: What do Visa and Mastercard do? An intro to card networks

#62

Post by JimsonYang » Wed, Sep 09, 2026, 7:21 PM UTC

losvedir wrote: post #44

I play the credit card "game" because I hate feeling like I'm leaving money on the table, but I really wish I didn't have to. Some degrees of fees make sense, to run the network, and handle fraud, but it's ridiculous that people have this sense that shopping should somehow fund your vacation. Where I am it's increasingly common to see credit card fees when checking out. I get it, because merchants are being charged 3…

Why do you play the points game?

I felt like if I didnt spend $1 on something that was the equivalent of me spending $50 to get those same credit card points

Re: What do Visa and Mastercard do? An intro to card networks

#63

Post by mopsi » Wed, Sep 09, 2026, 7:22 PM UTC

Bratmon wrote: post #17

collabs wrote: post #15

In my opinion, the only solution is everyone (individuals as well as corporations) gets a direct account with the federal reserve as long as you can associate a taxpayer identification with the account. Using it is voluntary but it is free of cost, paid for by taxes, and moving money to and from accounts is free of cost. Depositors would get the same overnight interest rate that banks do, and this interest is added e…

How are chargebacks resolved in this situation? This is an important question- most of the costs of a credit card providers come from dealing with fraud and chargebacks. That's partially because, under US law, credit card companies have to eat fraudulent charges if they can't get the person or company that did the fraud to do so. (Funnily enough, this is one of two places where protections for average people in the U…

You resolve it the same way you handle in-store cash purchases of products that turn out to be faulty.

There is no reason why fraud and contract violation must be handled by unelected and unaccountable payment processor, when the government has already set up a consumer protection system for disputes related to cash payments. The payment processor is best left as a dumb pipe that does what parties and (in case of disputes) courts tell it to do.

Re: What do Visa and Mastercard do? An intro to card networks

#64

Post by pennomi » Wed, Sep 09, 2026, 7:26 PM UTC

bob1029 wrote: post #34

VisaNet & friends make the modern consumer world go round. The fees they extract are a drop in the bucket compared to the economic activity that they enable with their networks. Many businesses simply couldn't exist without something approximating this. https://investor.visa.com/news/news-details/2016/Visa-Commis...

The problem is not that the tech is bad, it’s that the industry is a cartel with no viable way to disrupt the established players.

Re: What do Visa and Mastercard do? An intro to card networks

#65

Post by asdff » Wed, Sep 09, 2026, 7:26 PM UTC

losvedir wrote: post #44

I play the credit card "game" because I hate feeling like I'm leaving money on the table, but I really wish I didn't have to. Some degrees of fees make sense, to run the network, and handle fraud, but it's ridiculous that people have this sense that shopping should somehow fund your vacation. Where I am it's increasingly common to see credit card fees when checking out. I get it, because merchants are being charged 3…

Another thing to consider is your credit card rewards cash back etc are really trading your privacy for a little rounding error worth of discount in comparison to using cash.

You may also save far more money going cash only. E.g. some local restaurants near me give you like 5% off paying in cash. Gas is generally cheaper cash price vs card price or debit fee. You have a big job with a contractor, tell them you might be interested in paying cash and they might offer you a substantial discount.

Re: What do Visa and Mastercard do? An intro to card networks

#66

Post by asdff » Wed, Sep 09, 2026, 7:28 PM UTC

tonymet wrote: post #21

1970-01-01 wrote: post #20

>The merchant pays 2.5% The best way to pay for poor services already rendered and move on with life is to simply pay via card. Didn't like that haircut? Terrible food at the restaurant? Hold onto your cash and slip them the card.

Jokes on you. Merchants prefer credit cards because there is less loss than cash. 2.5% is nothing compared to 5-10% loss at the register. Plus easier and more accurate accounting.

If your employees are stealing you should probably nip that in the bud...

Re: What do Visa and Mastercard do? An intro to card networks

#67

Post by foobarian » Wed, Sep 09, 2026, 7:30 PM UTC

RobRivera wrote: post #24

techdmn wrote: post #7

I remember reading a comment here a while back about merchants being offered a discount on the processing fee if they also transmitted detailed data about the purchase (essentially the data that would be on the receipt). That data could then be resold on to advertisers. Does anyone remember this or have links to more data? (Not having much luck with search, maybe I'm hallucinating the whole thing.)

This would explain why so many damn coffee shops dont deal with cash now - the double as a coffee shop and data reseller

Huh, I thought accepting legal tender was a federal rule, I guess not. Looks like a salad variety of regulations that vary by state and city.

Re: What do Visa and Mastercard do? An intro to card networks

#68

Post by toast0 » Wed, Sep 09, 2026, 7:32 PM UTC

JimsonYang wrote: post #62

losvedir wrote: post #44

I play the credit card "game" because I hate feeling like I'm leaving money on the table, but I really wish I didn't have to. Some degrees of fees make sense, to run the network, and handle fraud, but it's ridiculous that people have this sense that shopping should somehow fund your vacation. Where I am it's increasingly common to see credit card fees when checking out. I get it, because merchants are being charged 3…

Why do you play the points game? I felt like if I didnt spend $1 on something that was the equivalent of me spending $50 to get those same credit card points

I don't play the points game, I use a cashback card.

I use a cashback card, because most merchants will charge me the same regardless of payment method, and getting a 4% discount (+ time value of money) is the lowest cost to me. If I use some other payment method, the merchant may keep more of the transaction amount, and that's great for them, but it doesn't improve my customer experience. If interchange fees are strictly capped and cashback cards disappear, I wouldn't be upset; but while they're here, I'm incentivized to use them... following economic incentives while doing economic transactions seems like the right thing to do?

Re: What do Visa and Mastercard do? An intro to card networks

#69

Post by mrguyorama » Wed, Sep 09, 2026, 7:39 PM UTC

losvedir wrote: post #44

I play the credit card "game" because I hate feeling like I'm leaving money on the table, but I really wish I didn't have to. Some degrees of fees make sense, to run the network, and handle fraud, but it's ridiculous that people have this sense that shopping should somehow fund your vacation. Where I am it's increasingly common to see credit card fees when checking out. I get it, because merchants are being charged 3…

>I wish there was a low fee credit card network that merchants didn't charge a fee for, so I could continue the simplicity of digital payments but opt out of this crazy Visa Infinite rewards accounting boondoggle.

This is called "Regulate the max fees" like Europe did, where they still have functioning credit card networks, including good fraud coverage, but you aren't expected to dance for the credit card company for peanuts of kickback.

Re: What do Visa and Mastercard do? An intro to card networks

#70

Post by moduspol » Wed, Sep 09, 2026, 7:39 PM UTC

asdff wrote: post #65

losvedir wrote: post #44

I play the credit card "game" because I hate feeling like I'm leaving money on the table, but I really wish I didn't have to. Some degrees of fees make sense, to run the network, and handle fraud, but it's ridiculous that people have this sense that shopping should somehow fund your vacation. Where I am it's increasingly common to see credit card fees when checking out. I get it, because merchants are being charged 3…

Another thing to consider is your credit card rewards cash back etc are really trading your privacy for a little rounding error worth of discount in comparison to using cash. You may also save far more money going cash only. E.g. some local restaurants near me give you like 5% off paying in cash. Gas is generally cheaper cash price vs card price or debit fee. You have a big job with a contractor, tell them you might…

Contractors, but also cosmetic health work. Invisalign, veneers, plastic surgery, etc. Probably most big-ticket items or services that you're not buying from a megacorp.

Sometimes they'll give even more than 5% because they can keep it off their books completely, but in those cases, they want physical cash--not just a check to avoid credit card fees.