Payments: The end of a monopoly
economist.com
Payments: The end of a monopoly
1–10 of 43 posts
Re: Payments: The end of a monopoly
#2tl;dr:
Banks' revenue from credit cards is under threat from payment mechanisms which bypass them:
- Paypal encourages bank transfers in some countries, to avoid cc interchange fees
- Bitcoin
- Telecoms operators' mobile payment services
- Store-specific prepaid cards
Furthermore, payments could become a loss leader for companies that make revenue from other sources (like ads or data). This would increase competition and further threaten banks' revenue from payments.
EDIT: As dllthomas pointed out below, loss leader isn't the right term here. Payments could be cross-subsidised by other services (e.g. ads) which are enabled/enhanced by the data/relationships from payments.
Re: Payments: The end of a monopoly
#3I mainly use credit card and paypal for one reason:
Give me 2% discount and I pay cash, or I pay in the US way, and you lose 3%.
This of course works best in countries like Germany, where credit cards and paypal are not widely accepted.
Re: Payments: The end of a monopoly
#4tl;dr: Banks' revenue from credit cards is under threat from payment mechanisms which bypass them: - Paypal encourages bank transfers in some countries, to avoid cc interchange fees - Bitcoin - Telecoms operators' mobile payment services - Store-specific prepaid cards Furthermore, payments could become a loss leader for companies that make revenue from other sources (like ads or data). This would increase competition…
> make revenue from other sources (like ads or data)
Just what we need, mining credit card history to target ads. :(
If this is the future of payments, I'd rather have the monopoly.
Re: Payments: The end of a monopoly
#5tl;dr: Banks' revenue from credit cards is under threat from payment mechanisms which bypass them: - Paypal encourages bank transfers in some countries, to avoid cc interchange fees - Bitcoin - Telecoms operators' mobile payment services - Store-specific prepaid cards Furthermore, payments could become a loss leader for companies that make revenue from other sources (like ads or data). This would increase competition…
Is "loss leader" really right, when you're selling ads or data? It seems more "cost of production"...
Re: Payments: The end of a monopoly
#6This article just proves that the monopoly is not going anywhere anytime soon. The Square Wallet is gone, Simple sold itself to a bank for cheap and bitcoin is still looking for a reason to exist. For starters.
Re: Payments: The end of a monopoly
#7[deleted]
Re: Payments: The end of a monopoly
#8tl;dr: Banks' revenue from credit cards is under threat from payment mechanisms which bypass them: - Paypal encourages bank transfers in some countries, to avoid cc interchange fees - Bitcoin - Telecoms operators' mobile payment services - Store-specific prepaid cards Furthermore, payments could become a loss leader for companies that make revenue from other sources (like ads or data). This would increase competition…
> make revenue from other sources (like ads or data) Just what we need, mining credit card history to target ads. :( If this is the future of payments, I'd rather have the monopoly.
[deleted]
Re: Payments: The end of a monopoly
#9I mainly use credit card and paypal for one reason: Give me 2% discount and I pay cash, or I pay in the US way, and you lose 3%. This of course works best in countries like Germany, where credit cards and paypal are not widely accepted.
In South Korea, it is illegal for merchants to offer different prices based on the payment method.
The law was intended to encourage credit card payments, because the paper trail makes it more difficult for merchants to under-report their tax obligations. (And the card companies lobbied hard, of course.)
In practice, merchants have found workarounds, such as offering more loyalty points for cash payments. Some of these workarounds are legal, some are not, but in any case the government is changing its stance on credit card payments due to soaring consumer debt. Now they're trying to encourage debit card payments . . .
Re: Payments: The end of a monopoly
#10I mainly use credit card and paypal for one reason: Give me 2% discount and I pay cash, or I pay in the US way, and you lose 3%. This of course works best in countries like Germany, where credit cards and paypal are not widely accepted.
In South Korea, it is illegal for merchants to offer different prices based on the payment method. The law was intended to encourage credit card payments, because the paper trail makes it more difficult for merchants to under-report their tax obligations. (And the card companies lobbied hard, of course.) In practice, merchants have found workarounds, such as offering more loyalty points for cash payments. Some of the…
I love my credit cards precisely for the paper trail! Makes everything much easier- tracking my finances, doing my taxes, etc...