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OpenAI is Visa – Buttering up the government to retain a monopoly

sherwood.news

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Re: OpenAI is Visa – Buttering up the government to retain a monopoly

#131

Post by robertlagrant »

ADeerAppeared wrote: post #16
insane_dreamer wrote: post #6

Doesn't explain what regulations Visa pushed for and got which helped it maintain its monopoly. Would be helpful to have some concrete examples of what it did and what OpenAI is trying to do. The point of the article sounds plausible, but doesn't really present any evidence to support it. Also OpenAI in no way has a monopoly of the kind that Visa/MC has.

> Also OpenAI in no way has a monopoly of the kind that Visa/MC has. I think this is misreading how literal the comparison is meant to be; Sherwood's running a bunch of "OpenAI is X" articles today. This is not about the massive duopoly which has been catastrophic for US payments, but about the way companies entrench themselves. > Doesn't explain what regulations Visa pushed for and got which helped it maintain its m…

> I think this is misreading how literal the comparison is meant to be

Agreed. When articles do this they want you to directly emotionally associate the two things, without having to provide intellectual evidence. I don't think that's very defensible.

Re: OpenAI is Visa – Buttering up the government to retain a monopoly

#132

Post by fakedang »

rqtwteye wrote: post #93
delusional wrote: post #54

Earlier quoted context omitted.

> Yea, I don't want to defend Visa, but a lot of their dominance came from network effects. I think it's worth noting that VISA is also really doing a pretty good job. Like the cards work. Here in Europe they seem eager to adopt emerging technology and are willing to invest to maintain their dominance. There's a ton of not so consumer friendly backroom deals with kickbacks for the banks and stuff, but the core produc…

They aren't very vendor friendly and their fees are way too high. Little bit like Amazon. they are are consumer friendly at the expense of their vendors.

Compared to Stripe which charges 2-3% roughly, Visa/Mastercard gateways charge 0.3-0.5%. Not sure where the high fees argument comes from, or I'm misconstruing something here.

Like an aforementioned comment stated above, their dominance is all about consumer convenience reinforcing vendor adoption. If you have an equally smooth payment process to compete against that, it will crumble. Case in point, India and UPI. Credit cards are largely used by the most affluent today, simply because UPI has become so prevalent for general transactions. UPI are actually a much easier way to carry out payments than credits cards are.

But of course, American banking is ages away with even FedNow not having been implemented in any strong form whatsoever.

Re: OpenAI is Visa – Buttering up the government to retain a monopoly

#133

Post by ipaddr »

dylan604 wrote: post #50
ipaddr wrote: post #42

Earlier quoted context omitted.

They have a monopoly on the name McDonalds. If McDonalds had a fry machine and lobbied that making fries anyone other way was dangerous and only they should be allowed to use the fry machine that would more align with this situation. It's not a monopoly but trying hard to get a government based one.

You're stretching so far to attempt to make a point you're now trying to equate a trade mark as a monopoly. These are totally different concepts and you've totally lost the plot with this analogy

McDonald's is considered an oligopoly, where a few firms dominate an industry and can set prices. McDonald's is not a monopoly because it doesn't sell a single unique good.

Re: OpenAI is Visa – Buttering up the government to retain a monopoly

#134

Post by EnnEmmEss »

robertlagrant wrote: post #131
ADeerAppeared wrote: post #16

Earlier quoted context omitted.

> Also OpenAI in no way has a monopoly of the kind that Visa/MC has. I think this is misreading how literal the comparison is meant to be; Sherwood's running a bunch of "OpenAI is X" articles today. This is not about the massive duopoly which has been catastrophic for US payments, but about the way companies entrench themselves. > Doesn't explain what regulations Visa pushed for and got which helped it maintain its m…

> I think this is misreading how literal the comparison is meant to be Agreed. When articles do this they want you to directly emotionally associate the two things, without having to provide intellectual evidence. I don't think that's very defensible.

https://news.ycombinator.com/item?id=42518753 gives more context and is relevant I feel

Re: OpenAI is Visa – Buttering up the government to retain a monopoly

#135

Post by AnthonyMouse »

Spooky23 wrote: post #113
lxgr wrote: post #92

Earlier quoted context omitted.

If they provide that much value to consumers intrinsically, then why are banks paying the same consumers to use them? I completely agree that credit (and just as much, if not more, debit) cards are an incredibly useful invention and great accelerator for online commerce. I don't know of any other way of paying a merchant I know next to nothing of that will allow me to get my money back if they do not deliver on their…

In a market, participants woo customers with financial and other incentives to select their product. The price discovery stuff is pretty obvious. Do business with PayPal. It works great… until PayPal arbitrarily decides to freeze your account. Use Venmo or cash app… except sellers will pressure you to treat it like a gift vs. a purchase. You can use ACH, but now some random company has access to your checking account…

> Do business with PayPal. It works great… until PayPal arbitrarily decides to freeze your account. Use Venmo or cash app… except sellers will pressure you to treat it like a gift vs. a purchase. You can use ACH, but now some random company has access to your checking account.

Pretty much everything except for credit cards and ACH are really using one of those two behind the scenes, whereas what you want is something that allows you to transfer money using ACH-level fees without the totally unnecessary ACH misfeature that you can't revoke merchants or predefine limits on how much they can charge.

But that's where the "Visa has captured the regulators to prevent things like that from existing" problem comes in.

> The biggest whiners about fees are small businesses

The biggest whiners about fees are small businesses because a) they have very thin margins to begin with, so 3% often means that Visa is taking more of the sale price than they keep themselves and can be the difference between a sustainable business and bankruptcy, and b) larger companies can negotiate deals and pay less than 3%, which creates another competitive advantage for big business that small businesses can't achieve, which small businesses rightfully dislike.

3% sounds like a small number until you're talking to someone with a 5% profit margin before they lose 3% of revenue to the credit card companies. Then you're telling them that they shouldn't care about losing 60% of their personal income to corrupt banking laws.

Re: OpenAI is Visa – Buttering up the government to retain a monopoly

#136

Post by AnthonyMouse »

dangus wrote: post #96
lxgr wrote: post #92

Earlier quoted context omitted.

If they provide that much value to consumers intrinsically, then why are banks paying the same consumers to use them? I completely agree that credit (and just as much, if not more, debit) cards are an incredibly useful invention and great accelerator for online commerce. I don't know of any other way of paying a merchant I know next to nothing of that will allow me to get my money back if they do not deliver on their…

I think you're missing the point here a little bit. To break this down more simply: Credit cards: Merchants pay 3% and pass the cost on to the customer, IRS gets the vast majority of business taxes paid (no way to under-report taxable income), average person gets all the benefits of a fully funded government plus 1-2% of their purchase back in credit card rewards. Average person also gets a revolving credit line with…

> IRS gets the vast majority of business taxes paid (no way to under-report taxable income)

I guess we should dispel this one if it's really why people think financial mass surveillance is a good thing.

Cash is not even close to the only way for someone inclined to do it to under-report taxable income.

Business income is revenue minus expenses. Anything that lowers revenue or increases expenses reduces taxable income. Businesses can deduct things that are personal rather than business expenses, overpay for deductible expenses to anyone giving a kickback under the table, sell at a discount to anyone giving a kickback under the table, do barter transactions and then deduct the traded merchandise as shrinkage, etc. Most businesses legitimately have single-digit profit margins, which doesn't take much to zero it out.

Then if they get caught they go to jail, which is the same thing that happens if they get caught not reporting cash sales.

And we haven't even scratched the surface of what large businesses do to avoid taxes. Spoiler: It's the same overall thing -- reduce revenue or increase deductible expenses -- but they generally have better lawyers and rarely go to jail even when they get caught.

Re: OpenAI is Visa – Buttering up the government to retain a monopoly

#137

Post by [deleted] »

insane_dreamer wrote: post #6

Doesn't explain what regulations Visa pushed for and got which helped it maintain its monopoly. Would be helpful to have some concrete examples of what it did and what OpenAI is trying to do. The point of the article sounds plausible, but doesn't really present any evidence to support it. Also OpenAI in no way has a monopoly of the kind that Visa/MC has.

[deleted]

Re: OpenAI is Visa – Buttering up the government to retain a monopoly

#138

Post by highcountess »

insane_dreamer wrote: post #6

Doesn't explain what regulations Visa pushed for and got which helped it maintain its monopoly. Would be helpful to have some concrete examples of what it did and what OpenAI is trying to do. The point of the article sounds plausible, but doesn't really present any evidence to support it. Also OpenAI in no way has a monopoly of the kind that Visa/MC has.

[dead]

Re: OpenAI is Visa – Buttering up the government to retain a monopoly

#139

Post by AnthonyMouse »

bruce511 wrote: post #126
lxgr wrote: post #100

Earlier quoted context omitted.

With your last sentence, you supply your own counterexample demonstrating that "tax-evasion-enabling cash or credit cards costing the merchant 2-3%, pick one" is a false dichotomy. As I've mentioned, another counterexample is that Visa and Mastercard credit cards very much continue to exist in the EU, even after consumer credit card interchange rates have been capped to 0.3%.

I'm shocked, shocked, to discover that in the land of the "free market" the market optimizes for corporate profit not low prices. This is not news. In the US people vote for politicians who promise low regulation, business friendly and "economy" priorities. Those politicians run with corporate money and favor corporations. Other places (like the EU) have people who vote differently and have more appetite for reigning…

> In the US people vote for politicians who promise low regulation, business friendly and "economy" priorities.

People vote for those politicians because that's what they want. But is the problem with what they want, or what they get?

Regulatory capture that puts up barriers to anyone trying to compete with the incumbents is neither "low regulation" nor what people want, but it's the status quo in the US.

Re: OpenAI is Visa – Buttering up the government to retain a monopoly

#140

Post by nottorp »

doctorpangloss wrote: post #71
pixl97 wrote: post #40

Earlier quoted context omitted.

Saying we should replicate the Russian economy then?

I'm mocking the whole idea of this or that lobbying being done to crush a particular competitor, when tech companies are very much a Rising Tide Lifts All Boats business.

They don't want to crush a particular competitor, they want to crush all competitors :)
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