Visa and Mastercard agree to lower average credit card interchange fee below 1%

Post by Osiris » Fri, May 19, 2023, 8:27 AM UTC

ivan_gammel wrote: post #43

mdasen wrote: post #31

Earlier quoted context omitted.

> I'm weary of government intervention in capping prices, but I'm not sure what's the alternative here Instead of capping prices, you could simply require any fees to be paid by the cardholder. Combine that with a standard for payment processing so that lots of companies could compete for payment processing and fees would drop really fast. If someone is using a POS terminal like Toast or Square, it should be trivial…

You won’t sell this idea in Europe. Here the price tag for anything is the full amount you pay - including all commissions and taxes. People use debit cards, the paid amount is immediately deducted from bank account. If customers are forced to calculate how much they actually will spend on each transaction, they will instantly switch back to cash.

Post by herbst » Fri, May 19, 2023, 8:28 AM UTC

alibarber wrote: post #123

crooked-v wrote: post #99

Earlier quoted context omitted.

You can't use a US debit card online, because functionality for that just doesn't exist in the US banking system. Edit, for clarity: You can't use it as a debit transaction . You can plug it into credit card systems, where it's run as a credit card transaction and interchange fees apply.

I'm confused - this commenter says the only reason some population of the EU have a credit card is to purchase stuff from US websites. Which to me implies that their EU debit card only works locally. In my corner of the EU - I don't recognise this at all as every debit card you would get from a bank here (as an adult with no bad credit judgements) is Visa branded and works just fine anywhere worldwide that would be s…

Post by rjmunro » Fri, May 19, 2023, 8:29 AM UTC

throwaway426079 wrote: post #117

arcticbull wrote: post #6

Visa and Mastercard don't keep much of interchange at all and never have. The vast majority is paid to issuing banks to pay for loan origination, fraud and, most significantly, to return in the form of cash back or points. These networks charge 0.2% for debit and 0.3% for credit in Europe as per regulation, you just don't get rewards there. Kinda sounds like they're just going to squeeze issuing banks. Cash back and…

I'm in the UK and I have had (still have) rewards on MC, Visa and Amex. This was the case when we were still in the EU as well.

Post by rjmunro » Fri, May 19, 2023, 8:31 AM UTC

Symbiote wrote: post #119

KRAKRISMOTT wrote: post #25

Earlier quoted context omitted.

They are low level infra companies that exist because of regulatory capture. I am referring to companies like X1 and to some extent Ramp. The high level fintechs driving consumer innovation like electronic wallets, interesting rebate card models, better banking UXes all require interchange fees. This is also why most consumer fintechs start in the US and UK first before expanding elsewhere.

The UK was part of the EU until recently, and still maintains the card transaction fee cap regulation.

Post by carlosjobim » Fri, May 19, 2023, 8:34 AM UTC

matsemann wrote: post #77

Waterluvian wrote: post #4

> That means on a $100 purchase, if a customer pays with a credit card, the retailer will get at least $99, where they previously would have kept as little as $97 in some cases. I absolutely love the heavy lifting “as little as” is doing here. > Businesses with annual Visa sales volume below $300,000 will qualify for the lower fee, as will those who do less than $175,000 from MasterCard. That’s revenue, not profit. S…

What I often find surprising is people or shops complaining about the fees, and then trying to use cash everywhere. Dealing with cash is so incredible expensive, just because you don't see the fee doesn't mean it's not there. Like my parents had to deal a lot with cash before. That meant thataafter every shift, you had to spend time counting it, and whole processes around that. Safe storage, extra security, extra thr…