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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

#341

Post by ghosty141 »

numpad0 wrote: post #186
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.

Debit cards still go through the same credit card infrastructure. The practical difference at this point is whether the card company backend defer payment until collection date for the benefit of customers, or don't wait and just call APIs on the spot. There's a whole "internet" of credit card infra that lets you pay using those numbers on the card like they are phone numbers. Stripe don't do handle their own payment…

PayPal and Apple Pay use my debit card so they somewhat do use it.

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

#342

Post by 9cb14c1ec0 »

kiririn7 wrote: post #167
9cb14c1ec0 wrote: post #39

Earlier quoted context omitted.

Yes. As a merchant it's pretty cool that the money just shows up and I don't have to chase down as much bad debt. The processing costs easily pay for themselves.

unfortunately those processing costs actually dont need to exist.(or atleast should be 10x smaller)

A lot of people would be really mad if their card rewards disappeared.

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

#343

Post by AnAfrican »

klrefg wrote: post #263
karlosvomacka wrote: post #133

Earlier quoted context omitted.

For US readers - in my country in europe I'd say that 95% of people have only debit card, not credit card. it's very not common to have a credit card here. Card payments are extremely common, but everyone uses debit card.

How do any of they rent cars when they travel? I think that still requires a credit pretty much anywhere in Europe. I’s bet the proportion is way higher than 5% even if the overwhelming majority use their credit cards the same was as debit.

I've encountered this issue recently for the first time.

Usually, there is a deposit pre-authorized on the card. The additional insurance plans would lower the deposit (to a few hundred for fuel basically). I usually take the insurance plans anyway because I've had bad experiences that made me happy I had it.

Now, I was in a place where rental companies required credit cards except for the lower end models. It took me a few attempts for one to realize that I would take the additional insurance anyway.

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

#344

Post by kevincox »

pjc50 wrote: post #338
ThunderSizzle wrote: post #332

Earlier quoted context omitted.

What happens if you don't have a phone that supports the App, or if you forgot your phone or lost it (aka stolen)? How are you allowed to function if the App is missing?

You also can't make a card purchase if your card is stolen ..

No, but my credit card has no battery, requires no cell service, is waterprrof and quite durable.

I see the advantages of the Chinese system but I really found myself missing my card.

- While payer-offline payments were possible most merchants didn't want to (and some seemed unable to) so payments in places with bad cell service were painful.

- It was a lot more steps to open the app and enter scanning mode or display your code than to just tap a card or phone.

- It was always unclear if you were scanning or being scanned, leading to friction for every payment (generally larger brands scan you and you scan for smaller merchants).

Honestly for in-person card payments are just nicer.

For online WeChat was better, but no different than Apple Pay or Google Pay except for course that it is standardized by the government.

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

#345

Post by yxhuvud »

klrefg wrote: post #263
karlosvomacka wrote: post #133

Earlier quoted context omitted.

For US readers - in my country in europe I'd say that 95% of people have only debit card, not credit card. it's very not common to have a credit card here. Card payments are extremely common, but everyone uses debit card.

How do any of they rent cars when they travel? I think that still requires a credit pretty much anywhere in Europe. I’s bet the proportion is way higher than 5% even if the overwhelming majority use their credit cards the same was as debit.

If you don't accept debit cards you get no customers.

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

#346

Post by AnAfrican »

dietr1ch wrote: post #138
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.

Some businesses pass you the credit card fees if they offer other payment methods. You'll even hear about a discount around VAT/2 if you pay with cash sometimes. I think that hiding the CC fees into the price that you pay with all payment methods should be illegal.

>You'll even hear about a discount around VAT/2 if you pay with cash sometimes.

That's because they do VAT (and Corporate tax) fraud.

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

#347

Post by lxgr »

dizhn wrote: post #265
lxgr wrote: post #206

Earlier quoted context omitted.

Cards have supported strong, positive cardholder authentication at the POS (chip and PIN) and online (3DS) since the 90s. It’s entirely the US credit card industry and its regulating bodies’ fault that it has made neither mandatory in the way that e.g. the EU did, and is in fact fighting any attempt to do so tooth and nail (please think of the conversion rate!!)

Can you guys still write a check at the supermarket checkout? No pin credit cards are small potatoes next to personal checks in terms of weirdness. But I wish we had that trust culture everywhere.

Which guys? :)

I haven't seen checks being used to pay for groceries in either the US or EU in the past few years, in any case.

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

#348

Post by lxgr »

dqv wrote: post #319
lxgr wrote: post #203

Earlier quoted context omitted.

Except that you have strong statutory rights and commercial agreements between your bank and the card networks making it very likely that you’ll be made whole.

> likely > will Which is why the credit card is still the better option. Especially given that the max liability on a credit card is always $50 if caught within the first 60 days, while the max liability on a debit card is $50 only if caught within the first two days , then up to $500 if reported after up to 60 days. They may post a provisional credit when I report the fraud on the debit card or they can wait up to 1…

> while the max liability on a debit card is $50 only if caught within the first two days

Within two days of learning of the fraudulent use or the loss of an "access device" (i.e. a card). Otherwise you have 60 days from the statement date as well.

> I will take the ding to my credit report and a lawsuit over actual money taken directly out of my account any day.

That's definitely true for many people, but probably not for many others, e.g. anyone wanting to buy a house or even rent an apartment.

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

#349

Post by lxgr »

dqv wrote: post #327
lxgr wrote: post #201

Earlier quoted context omitted.

I don’t thing Regulation E allows banks to require a police report before processing an unauthorized payment, nor can they outright refuse to do so. Practically, Reg E is essentially as strong as Reg Z.

> Practically, Reg E is essentially as strong as Reg Z. Not even practically, but that's beside the point. The point is that with regulation E, I am potentially put in a position where I have to work to get my money back; I have to file a lawsuit against the bank if I think their determination is wrong (and that's assuming there isn't an arbitration provision, but many people don't realize they agreed to binding arbi…

> With regulation Z, the bank has to work to get their money back.

Yes, but you potentially have to work to get your credit back.

> And it's $0 liability under many circumstances mandated through the regulation, not just a revocable promise from the bank.

Debit card liability is also largely mandated to be $0 under card scheme rules.

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

#350

Post by fsuts »

maelito wrote: post #72

Well I don't really know what they do, but what I know is that Visa transactions costs are 0,22 € out of a payment of 1 €, Mastercard's is 0,23 €, and the French CB network is 0,17 €. All of them do the same : ensure I get the money from the customer. Of course it's a larger project to run this in the whole world, but shouldn't it scale to less along with the number of billions of customers instead of the other way r…

USA is currently trying to bully Brazil who introduced their own PIX system.

I think USA has been behind the visa and Mastercard dominance as it gives them nearly every financial transaction globally and their intelligence has that data in realtime.

Not to mention the tax take and ensuring max use of US dollar as reserve currency

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