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

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

#101

Post by carlosjobim »

nemomarx wrote: post #90
why-el wrote: post #56

Earlier quoted context omitted.

> a register is a mechanical device to power and maintain, surely a million times less expensive than a subscription to a POS....this is not a strong argument.

if you cut out all the other details they mentioned I guess. how much do you think taking the cash to the bank weekly costs?

Nothing, because the owner is rejoicing every step of the way.

I'd say employee theft is the only reason a coffee shop would be "no-cash", and fear of robbery in a few places.

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

#102

Post by massagedpelican »

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.)

the main purpose of that data is for fraud detection, anything downstream (i.e. selling it to advertisers) is just the cherry on top. Merchants are always financially incentivized both implicitly and explicitly to do anything that would reduce fraud and increase the rate of successful authorizations.

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

#103

Post by einpoklum »

superxpro12 wrote: post #3
hungryhobbit wrote: post #2

They tax our entire economy at X rate, while maintaining their infrastructure only requires Y cost ... and X is significantly higher than Y. From the actual article: > The payment processor keeps 0.35% ($0.35), then pays 2% ($2.00) to the cardholder’s issuing bank and 0.15% ($0.15) to Visa. The 2% is the interchange fee, commonly known as interchange. The 0.15% is the network assessment fee. 8 In other words, they ge…

middlemanning is the most american of business ventures

I thought that title belonged to bombing campaigns and coups by shady guerilla groups.

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

#104

Post by johannes1234321 »

qurren wrote: post #86
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 used to think "I should be nice to merchants" and pay everything in cash. That was 15 years ago. Now, living costs have gone up, I'm getting taxed to death by not just governments but increasingly more by businesses themselves ("benefits fees", "installation fee", "convenience fee", guilt-tip screens, sneaky price increases, etc.) so now I feel no guilt in playing the system to get at least some of my money back. N…

> I used to think "I should be nice to merchants" and pay everything in cash.

That is only "nicer" as it allows to evade taxes. (Which some may consider nice)

But cost for cash is comparable to card payment if looked at seriously

* You need working time to count it

* You need working time to bring to bank (or request pickup, which costs)

* The bank will charge the deposit

* The bank will charge for the change you need

* In the shop the cash has to be protected (safe? Protection against robbery)

* This requires procedures for shift change etc (thus training time and prolonging working time)

* There is a risk of fraud (counterfeit, swap tricks etc.)

* Employees might have sticky fingers

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

#105

Post by asdfasvea »

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…

It boggles my mind that the government has privatized currency to these people.

Crazy-person-but-actually-really practical-idea:

Nationalize one if these networks. Maybe Discover.

The US government should provide us digital currency. The simplest way is to force the current systems to do that. All that rent they collect in terms of transactions fees shouldn't be profit for a private business but fees of the government.

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

#106

Post by seabre »

jimbob45 wrote: post #84
ianhawes wrote: post #58

Earlier quoted context omitted.

There is, it's called debit cards, but Stripe et al. "simplified" pricing by charging a percentage regardless of card type instead of the traditional interchange-plus pricing. Merchant banks "used to" make money by tacking on fixed fees, i.e. a set-up fee, terminal fee, monthly fee, etc, but then Stripe came along and provided (1) a better dev experience, (2) better onboarding, and (3) simplified pricing.

You have to wait for the investigation to complete to receive compensation if you’re hit by fraud on a debit card. Credit cards don’t share that issue. If you’re poor or living paycheck-to-paycheck, debit cards are potentially a risk to your livelihood.

As someone who has been hit with fraud on a debit card and a credit card, the process to recover money from fraud on a credit card is so much easier and more hassle-free than a debit card.

The big difference is that with a debit card, it's your money that is hit by fraud. The debit card is basically just a proxy. You have to go file a police report. You have to hope the bank will give you the money back.

When the credit card gets hit, it's the credit card company's money and they will seemingly chase the fraud to the ends of the earth to recover it.

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

#107

Post by Navarr »

asdfasvea wrote: post #105
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…

It boggles my mind that the government has privatized currency to these people. Crazy-person-but-actually-really practical-idea: Nationalize one if these networks. Maybe Discover. The US government should provide us digital currency. The simplest way is to force the current systems to do that. All that rent they collect in terms of transactions fees shouldn't be profit for a private business but fees of the governmen…

Discover was JUST purchased by Capital One, so I think they'd hate for it to be nationalized

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

#109

Post by [deleted] »

kazinator wrote: post #98
qurren wrote: post #86

Earlier quoted context omitted.

I used to think "I should be nice to merchants" and pay everything in cash. That was 15 years ago. Now, living costs have gone up, I'm getting taxed to death by not just governments but increasingly more by businesses themselves ("benefits fees", "installation fee", "convenience fee", guilt-tip screens, sneaky price increases, etc.) so now I feel no guilt in playing the system to get at least some of my money back. N…

> If merchants across the world make a deal with me to charge exactly the listed/advertised number exactly, no more, no less, then I'll pay in cash again. Where are you not getting this? You mean taxes on top of the retail price? You would pay cash, if the merchants colluded with you in evading taxes?

[deleted]

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

#110

Post by ks2048 »

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...

It seems Visa revenue is $40B/year. You shouldn't compare that to the amount of economic activity they enable - you should compare it to how much it could cost to run a system like theirs.
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