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

tautology.town

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

#111

Post by kevin_thibedeau »

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.

I've always had fraudulent debit charges automatically reverted. Typically the bank's fraud detection disables the card and you clear up the matter on the phone. Or they call you to verify if a suspicious charge outside your profile was actually yours. The banks aren't required to do this but they can choose to provide this level of service.

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

#112

Post by montenegrohugo »

Some light self-promotion but also longer term thoughts:

A large part of the promise of crypto and stablecoins was to displace Visa and Mastercard rent-seeking. This didn't seem to happen. Most modern neobanks, our own included (https://peanut.me), actually seem to EMBRACE Visa and Mastercard. Almost all offer an actual Fiat card within their app, instead of boldly saying "No, pay with crypto, the future of money!"

This is somewhat disappointing in the short term, but longterm i believe it offers a clear transitory path to full decentralized money adoption. Already today we're seeing a growth in direct peer to peer payments in peanut, and merchants slowly starting to adopt it as well. I imagine the same is happening across the industry. In a competitive economy, the better currency (read: crypto, stablecoins) wins and eventually absorbs adoption.

my 2 cents

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

#113

Post by carlosjobim »

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…

Travel and tourism is about 9% of the world economy, and by some measures considered the largest economic sector in the world. Visa and Mastercard will continue to be dominant.

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

#114

Post by supertrope »

zahlman wrote: post #99
foobarian wrote: post #74

Earlier quoted context omitted.

Clankers found me one study [1] that suggests total handling costs may actually be this bad, but are highly business dependent e.g. restaurants are worse than grocery stores [1] https://www.ihlservices.com/product/the-cost-of-cash-handlin...

I'm just seeing what looks like an attempt to sell me a PDF. What actually is the source of such costs? The cashier still has to be paid even if the customer is using a card. Presumably there isn't anywhere near that much theft from registers, or people messing up giving change?

Employee theft. Store manager theft. Robberies. Counterfeits. The extra time spent at each cash transaction and re-counting at the end of the day. Going to the bank, or paying an armored car service. Banks charge merchants a percentage of each cash deposit. Buying safes and pointing cameras down at each register.

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

#115

Post by iancarroll »

hadrien01 wrote: post #19
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.)

Level 2/3 data: https://docs.adyen.com/payment-methods/cards/enhanced-scheme... It's only available in the US, many countries have lower interchange fees and prohibit sending this data.

Importantly, there is only an incentive for L2/L3 data on business/corporate cards, which have an inflated interchange rate above personal cards anyway.

This is not a scheme to get enhanced targeting data for personal transactions.

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

#116

Post by consumer451 »

foobarian wrote: post #74
seri4l wrote: post #48

Earlier quoted context omitted.

>5-10% loss at the register Where did you get this number from?

Clankers found me one study [1] that suggests total handling costs may actually be this bad, but are highly business dependent e.g. restaurants are worse than grocery stores [1] https://www.ihlservices.com/product/the-cost-of-cash-handlin...

Clank deeper, please. You gave us content marketing from the electronic payment industry:

"Does IHL Group have any connections to merchant providers?"

> IHL Group sells market intelligence, vendor directories, and lead generation data to the electronic payment industry.

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

#117

Post by rednb »

bob1029 wrote: post #93
rednb wrote: post #85

Earlier quoted context omitted.

You are literally linking to a page published by Visa's Investors Relations Department. The problem is that like all cartels, they hold progress back. Things could be even more efficient than the current state of affairs. For example we could have open standards with thousands of local players, much faster settlement times etc... There are also aspects such as the fact that due to this concentration of power, the who…

I like how providing an incredibly efficient payment network is framed as holding progress back. I'd frame it as making the standards for competition very high. I don't see people getting super ideological about their inability to create monocrystaline turbine blades or 2nm semiconductors in their garages. Why payment networks? Because computers? The overall network is way more complicated than a specific technologic…

I 100% agree that their business is operated extremely well and delivers lots of value.

I am just saying that in my opinion, society would be even better off if this industry wasn't controlled by a cartel and i pointed 2 examples of how.

One difference between this and turbines, is that payment networks are sitting at the heart of the economy of countless countries. Turbines have a very different risk profile, much more modest and localized.

Russia was for example cut off from high-tech maintenance contracts but has been able to deal with it by manufacturing their own replacement part + there are maintenance cycles and spare parts so any disruption in service is not immediate unlike payments.

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

#118

Post by CGMthrowaway »

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…

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

That's the banks (lenders), not the payment networks.

>Crazy-person-but-actually-really practical-idea: Nationalize one if these networks. Maybe Discover.

The central planners want to. It's called FedNow.

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

#120

Post by Aspos »

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…

Each of those networks carry a lot, a lot of ancient stuff. Gov is better off building a brand new network from scratch and promote it as a standard for banks to join.

There are plenty of great examples from this century all over the world.

Even Iran has a better payment infra than the US.

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