Hacker News Board Hacker News, browsed like a classic message board
Live data from Hacker News

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

tautology.town

Post reply on HN
Print view View original

351–360 of 370 posts

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

#351

Post by fsuts »

karlosvomacka wrote: post #133
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.

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.

Uk law gives significantly more protection on credit card purchases than debit card. As it’s treated as a finance product so the lender is has responsibilities.

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

#352

Post by pocksuppet »

diegocg wrote: post #26
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…

So the article shows how visa and mastercard are, by far, not the ones taking the largest fee, and the solution is to get rid of them? Where are you going to do the transactions in your scheme? Because credit card transactions are not the same as sending money from one bank account to another. There are settlements, disputes, chargebacks, etc. How is the central bank going to offer the same variety of products descri…

Visa and Mastercard are the ones setting the rules. They are the ones who decided that the fee can't be added on to the purchase price. If your credit card added 1% to every transaction from your perspective, but the competing bank's card only added 0.3%, you would have competition pressure.

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

#353

Post by pocksuppet »

bijowo1676 wrote: post #148
kevin_thibedeau wrote: post #111

Earlier quoted context omitted.

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.

the cc fraud (and fraud protection) is THE main selling point of Visa/MC credit cards. it is that different treatment of debit/cc fraud that pushes people towards high fee cc. it is cc fraud protection that justifies high cc processing fees. without cc fraud there is no need in visa/mc duopoly.

I thought the main selling point was that they work almost anywhere. Whereas my EFTPOS card only works in Australia, my Girocard only works in Germany and my Pix account only works in Brazil.

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

#354

Post by pocksuppet »

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…

I don't know if you're aware, but there was a whole lot of controversy around Central Bank Digital Currencies a few years ago. Mainly because the government can instantly see every transaction you do and will use it to decide if you're a terrorist or not, and they have a terrorist catching quota. They can also instantly block your account. And if such system is available, the government will phase out cash.

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

#355

Post by enaaem »

smelendez wrote: post #262
danvayn wrote: post #258

Earlier quoted context omitted.

Yes, it’s because Americans have to build credit or otherwise optimize their credit score to finance large purchases. In most other countries there either isn’t a credit score concept or your credit score does not have to be built up over a long period to be effective like it does here. It doesn’t help that a third of Americans dont really have savings either; credit helps them to work around this

I use credit for the purchase protection (I believe many debit cards have this as well but it’s easier when you haven’t yet paid the charge, and seems better enshrined in law for credit), for the rewards (which including signup bonuses can be huge), for the float period, and for security — if somebody fraudulently uses a credit card versus a debit card, there’s no actual money missing while the situation gets resolve…

Every time I had issues with fraud it was with a cc. The fraud protection is just bandage for an inherently unsafe system that you are paying for yourself.

That being said, I do get that for US individuals it is completely rational to use cc's. I would do that too. If you are paying 3% Visa/MC tax anyway, then you might as well use their perks.

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

#356

Post by krzyk »

_bernd wrote: post #306
bux93 wrote: post #296

Earlier quoted context omitted.

Note that the caps were introduced because the EU already had widespread use of bank cards, but local schemes were being replaced with Mastercard/Visa debit - the caps were brought in to prevent the duopoly from profiteering. (Apple/Google pay also use Mastercard/Visa virtual cards in the EU.) Before the cap, credit cards had way higher fees and there were some reward cards, which led to merchants simply not acceptin…

At least in Germany as far as I'm aware all banking cards are in fact "simple" visa cards who uses "V-pay", since 2012/2014? Personally I "like" or prefer V-pay because it made payment in the EU more easily for me without the need of a credit card even 8 years ago. Since the pandemic, I only pay for a (real) credit card (with daily billing) because some goods or services can only be paid with a "real" card, like more…

I'm quite opposite. I avoid any places that don't accept card payments, because it usually means they are avoiding taxes. And I don't have cash on me, or wallet. Only phone or sometimes only my garmin watch (with garmin pay).

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

#357

Post by krzyk »

the_af wrote: post #324
LeBit wrote: post #151

Earlier quoted context omitted.

As a Canadian , I thought that was the expected de facto way of using credit cards: you pay everything with it so you get rewards (ie money) at the end of the year as a function of how much you used the card during the year. At the end of the month, you pay whatever the outstanding balance is, otherwise you pay high interests.

I thought this was how credit cards were used the world over. It's certainly how I use them. How do Americans use them that differs from this? Color me confused. (Also: installments. They are often the norm in my country, but I understand they are less common for Americans).

I don't think that works like that in Europe, cash backs are rare and even fewer people use them.

I have credit card only to be able to rent car on vacation. It is not used outside of that. For other payments I use debit card.

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

#358

Post by raverbashing »

yayachiken wrote: post #315
KellyCriterion wrote: post #310

Earlier quoted context omitted.

> o nobody needs to pay extra fees Processing cash is by far >not free<! In fact, it costs a lot of money due to all the things involved (counting/collection/recycling etc). Anf it inwolves additional risks for the handling party.

People often say that but does the cost for handling cash really scale (even approximately) proportionally with the number of transactions or revenue? Or is it more binary that you have to decide, you either handle any cash and have the cost associated with it, or you refuse to take cash at all? If the latter is the case, then avoiding cash altogether seems somewhat unrealistic where I am from. And if it doesn't scal…

> but does the cost for handling cash really scale (even approximately) proportionally with the number of transactions or revenue?

Yes, it sounds weird but it does

- Providing change is a pain and it's a "fixed time" cost

- Moving money around (also some banks charge for money deposits for commercial accounts)

- Dealing with "shrinkage" in various ways (even if you have insurance)

Post reply on HN