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Payments: The end of a monopoly

economist.com

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Re: Payments: The end of a monopoly

#11

Post by us0r »

kijin wrote: post #9
kephra wrote: post #3

I 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'm pretty sure it is against the card association rules as well.

Re: Payments: The end of a monopoly

#12

Post by hassanhassan »

rayiner wrote: post #4
rahimnathwani wrote: post #2

tl;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.

The future is already here. Cardlytics (a card-linked marketing company) has partnerships with 400+ financial institutions, and claims to have insight into consumer purchase behavior for ~70% of U.S. households and ~30% of U.K. households according to their Crunchbase profile.

Re: Payments: The end of a monopoly

#14

Post by kephra »

kijin wrote: post #9
kephra wrote: post #3

I 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…

Isn't is illegal, or impossible to order online, if you dont run windows in South Korea also?

In Germany Skonto (discount) for paying within 7 days is common business practice. But credit cards of course don't like it, if you use ask for discount for not using CC.

Re: Payments: The end of a monopoly

#15

Post by kijin »

kephra wrote: post #14
kijin wrote: post #9

Earlier quoted context omitted.

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…

Isn't is illegal, or impossible to order online, if you dont run windows in South Korea also? In Germany Skonto (discount) for paying within 7 days is common business practice. But credit cards of course don't like it, if you use ask for discount for not using CC.

> Isn't is illegal, or impossible to order online, if you dont run windows in South Korea also?

So far, yes.

Things are beginning to change because Chinese consumers are crowding into Korean stores, both online and offline. Even the President is concerned that the old system hurts the economy by turning away potential buyers. Guess what, one of the perks of being a semi-authoritarian culture is that if the President complains about something, everyone rushes to find an alternative ;)

In any case, I wish there were more competition in the payment processing scene of my country as well. Most people haven't even heard of PayPal here, let alone newer and better alternatives. Perhaps once we get rid of the ActiveX dependence, more startups will be able to enter the market.

Re: Payments: The end of a monopoly

#16

Post by jpatokal »

pbreit wrote: post #6

This 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.

From the friendly article:

For the most part, however, the challenge is not head-on. In fact, by making it easier to buy things, most new payments services are pushing extra business to the existing channels, dominated by banks. ... In the long run, banks risk becoming the providers of a cheap, commoditised service, with most of the money in the payments business going to firms that make customers’ lives easier or provide new services. ... Even worse for banks would be a future in which people begin to store more of their money outside the banking sector and make payments that are not tied to a formal bank account.

Re: Payments: The end of a monopoly

#17

Post by Sami_Lehtinen »

sliverstorm wrote: post #10
kijin wrote: post #9

Earlier quoted context omitted.

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...

I always pay by card. I do have some cash for emergencies but I withdraw more maybe yearly. So that means I use cash just a few times per year. I know that many people do not carry any cash at all. Our they have something like 20€.

Re: Payments: The end of a monopoly

#18

Post by fiatjaf »

kijin wrote: post #9
kephra wrote: post #3

I 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…

Please, talk more about this customer loyalty stuff. Here in Brazil it is also illegal to offer different prices (although in some cases the courts have allowed it), but the business mostly aren't finding any way of overcoming this. Myself included.

Re: Payments: The end of a monopoly

#19

Post by Gustomaximus »

kephra wrote: post #3

I 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.

Cash also has costs unique to its physical holding like counting, security, transport, storage and theft. As a % I guess this would vary by business but would balance some against the clip payment companies take.

Re: Payments: The end of a monopoly

#20

Post by hkmurakami »

kijin wrote: post #15
kephra wrote: post #14

Earlier quoted context omitted.

Isn't is illegal, or impossible to order online, if you dont run windows in South Korea also? In Germany Skonto (discount) for paying within 7 days is common business practice. But credit cards of course don't like it, if you use ask for discount for not using CC.

> Isn't is illegal, or impossible to order online, if you dont run windows in South Korea also? So far, yes. Things are beginning to change because Chinese consumers are crowding into Korean stores, both online and offline. Even the President is concerned that the old system hurts the economy by turning away potential buyers. Guess what, one of the perks of being a semi-authoritarian culture is that if the President…

Is something like paypal for person to person fund transfers legal in South Korea? I ask, because I was surprised when my friends in Japan told me that that was illegal in japan!
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