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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

#361

Post by alibarber »

avianlyric wrote: post #140
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.

The EU caps all card interchange fees at 0.3% for credit cards and 0.2% for debit, which is an order of magnitude lower than some of the fees in the US. That’s why you don’t see the same kinds of credit card deals in the EU compared to the US.

Note that these are interchange fees charged by the networks. Unless you're operating at massive scale, merchant account suppliers still charge the shop whatever they want. The shop is paying far more than 0.2 / 0.3%.

2.5% for credit and 25c fixed for debit is the usual ballpark.

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

#362

Post by dfish »

GJim wrote: post #339
montenegrohugo wrote: post #286

Earlier quoted context omitted.

> It’s slow and expensive and doesn’t scale. This is 2020 speak. In 2026, crypto scales and its extremely cheap. it costs less than a hundredth of a cent to do a transfer today.

> In 2026, crypto scales and its extremely cheap. And is helping fry the planet. No thanks.

[dead]

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

#363

Post by dfish »

topranks wrote: post #152
simonmales wrote: post #134

Earlier quoted context omitted.

True on the main chain of Bitcoin. Bitcoin payments on the lightning network are not computationally intense.

Hahaha haven’t heard that one in a long time. Cracked me up.

guy who doesn't know what peer-to-peer technology is, laughs at man who does!

please stop using the internet! it might be slow and expensive to run! it requires insanely big cell towers and submarine cables! it won't scale!!11!! kind of guy

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

#364

Post by carlosjobim »

warkdarrior wrote: post #160
carlosjobim wrote: post #126

Earlier quoted context omitted.

You have to consider the interest of the involved parties rather than the efficiency of a system. Making a purchase is (still) voluntary for the customer. For everyday purchases at physical stores, cards are convenient. You just swipe and maybe put your PIN. But other digital payment methods or cash can be just as convenient. You're never going to chargeback a coffee, a sandwich, or your groceries. But for distance p…

> Cards have fraud protection. This is only in US and it is needed in US, because US has very limited consumer rights regulation. EU has much stronger consumer rights (mandatory 14-day return windows for any reason, easy cancellation for subscriptions, mandatory 2-year warranties). So the things that the (private) credit-card companies protect you from in US (via chargeback support and fraud detection) are things tha…

What you're writing is not true. The fraud protection is world wide, not US only.

The chargeback fraud protection of Visa and MasterCard is on top of every and any other consumer protections. It is not instead of other consumer protections.

This is extremely important, because if you as a customer are the victim of fraud, getting your money back from Visa or MasterCard is much faster and more convenient than making a police report, going to the courts, etc. And it is a very strong deterrent against fraudulent behaviour by vendors. If they keep defrauding people, they get kicked out of the card network.

Failing to get your money back through Visa or Mastercard, does not mean that you have waived any of your other legal consumer rights. If that method doesn't work, you can continue through the police and courts.

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

#365

Post by carlosjobim »

warkdarrior wrote: post #153
carlosjobim wrote: post #101

Earlier quoted context omitted.

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.

You think the owner is taking the cash to the bank?? Unless they are an one-person operation, they likely have an employee do it (among their other duties).

The employee will of course rejoice on the owner's behalf when walking to the bank.

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

#366

Post by fransje26 »

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…

> the French CB network is 0,17 €.

No, that's not right. The CB interchange fees are 0.2% + 0.0011€ network fee.

Therefore for 1€ : 0.002 + 0.0011 = 0.0031€, not 0.23€

So you have 0.2269€ of fees coming out of left field, with someone else making a massive profit.

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

#367

Post by dfish »

gwbas1c wrote: post #129
montenegrohugo wrote: post #112

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!"…

The problem is that bitcoin (and similar) are so computationally intense to run, that the transaction cost is much higher than Visa's. Furthermore, a currency needs a government (or similar kind of body) to manage its stability, by printing (and buying) money. Otherwise, we'll see wide fluctuations in value like what happens with Bitcoin.

Bitcoin and similar are computationally intensive to run because of a thing called decentralization. Visa and Mastercard don't need consensus to perform payments, but they for sure don't have a single server running, I am sure they have more servers than bitcoin nodes, without counting on stripe, paypal, ... and other payment providers IN THE WORLD :)

There is something called lightning, which is p2p payments through bitcoin!

> Furthermore, a currency needs a government (or similar kind of body) to manage its stability, by printing (and buying) money. Otherwise, we'll see wide fluctuations in value like what happens with Bitcoin.

call the economists! a currency needs a government! But only from 1971 onwards, before that people didn't have currencies! Oh, you don't want to use the US dollar? the best currency ever!? I guess we'll have to bomb your country and neighboring ones to change your mind.

> to manage its stability

aka lose 2-4% of purchasing power per year. Thank you central bank! you saved us!

> Otherwise, we'll see wide fluctuations in value like what happens with Bitcoin

Oh no! The horror! A currency that can also go up!!! I guess we need a central bank for oil! to keep the price of oil stable! And food too!

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

#369

Post by greyw »

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.

Yeah because they commit tax fraud. I wont help businesses commit fraud.

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

#370

Post by alwaysmrno »

ThunderSizzle wrote: post #332
alwaysmrno wrote: post #307

Visa and Mastercard are legacy companies providing a service that is outdated in the modern world. China generally doesn't use Credit cards because when they "Modernized" there was new technology and infrastructure so you didn't need a nosey middel-man to handle the transaction. Instead they use apps. Scandinavia is hopefully moving away from these card-providers soon. They have the bankaxept system that works flawle…

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?

"What if there's no electricity!!!" "What if there's no roads!!!"

What if's can be used to kill a conversation or discussion because they are impossible to argue. "If there's no Electricity i'll just use my diesel generator to power the store. WhAt if YoU ForgoTT to FueL IT?!". There is no discussion to be had because one side is not interested in it.

What you should be asking is What is plausible. IS it plausible that you buy a phone that doesn't support the app? No, there's two OS's for mobile phones. They will have an app you can pay with.

IS it plausible you forgot your phone or it got stolen? Yes. But you are just as likely to have your wallet stolen. So its not really applicable.

"How are you allowed to function if the app is missing?" Is an illogical question. The apps already exists in several countries and works flawlessly.

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