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Can the Visa-Mastercard duopoly be broken?

economist.com

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Re: Can the Visa-Mastercard duopoly be broken?

#151

Post by konschubert »

philip1209 wrote: post #49

Fraud protection of credit cards is the root of modern e-commerce. In some ways, Visa and Mastercard are the privatized court systems of the internet. If I end up on a random, self-hosted ecommerce site and decide to make a purchase - what guarantee do I have that the item will show up or be as-described? If I bought something through a bank transfer, reversing that purchase would be incredibly difficult. And, suing…

But I am sure they would prefer paying 1% fees for exactly the same service.

Or a 0.1% fee.

Re: Can the Visa-Mastercard duopoly be broken?

#152

Post by JumpCrisscross »

philip1209 wrote: post #144
JumpCrisscross wrote: post #134

Earlier quoted context omitted.

> I'm sure online merchants are happy to keep paying their ~3% fees as long as sales continue There might be an opening in subscriptions. Those merchants know their customers, and may be willing to take on fraud risk for material bump in revenue.

I think the opportunity is for platforms that can manage risk. Consumers are more likely to give direct bank account access to platforms that they trust. For example, Apple's App Store is well-positioned to run subscriptions over ACH, and they have the consumer trust to get some adoptoin. But, then you're trading one evil for another - because Apple will want their cut, too. At the end of the day - it's a battle betw…

> Apple's App Store is well-positioned to run subscriptions over ACH, and they have the consumer trust to get some adoptoin

You have to get one side to trust it. Visa and MasterCard succeeded by making it easy for consumers. The counterpunch is likely in winning over merchants. If Netflix or Spotify gave me a small discount for running over alternate payment rails, I don't need to trust the intermediary, I trust Netflix or Spotify to not screw a decade-long customer over pennies.

Re: Can the Visa-Mastercard duopoly be broken?

#153

Post by odrekf »

tossl568 wrote: post #116
odrekf wrote: post #76

Earlier quoted context omitted.

What you call "Bitcoin", is not Bitcoin by its own whitepaper. And it certainly DOESN'T have 100% uptime. Keeping blocks artificially limited at 1mb doesn't make it more decentralized, it actually makes it more centralized, since barely anyone in the world can use the network or pay the fees when a bunch of people are using it at the same time.

It's Bitcoin by every metric you can name: users, trust, fees, hashrate, price, market cap, security, exchange support, merchant acceptance, codebase quality, developer talent. Regardless of your subjective opinion of whether it's the same as it's own whitepaper based on whatever nonsense you've read from Roger Ver or whoever. BCH still has transaction mallebility because it was born out of greed of miners who did't…

Can you show me where in the whitepaper it mentions your metrics? I didn't see anything about say, price in there. I did see a lot of mentions about it being cash though (also cheap to use, beat credit cards, no intermediaries, etc). Also SPV wallets (point 8). Nothing about LN.

In any case, BCH simply works 100% of the time, it's instant, extremely reliable and cheap to use, and it's actually being used as cash in the real world (unlike BTC). That's the most important thing in my opinion.

Re: Can the Visa-Mastercard duopoly be broken?

#154

Post by njarboe »

bcrescimanno wrote: post #108
kelnos wrote: post #26

Earlier quoted context omitted.

Perhaps this is an irrational fear, but one of the reasons I like credit cards is because when a charge happens, no money leaves my personal accounts. If a charge is fraudulent, it gets cleared up without me being out some amount of money until it gets cleared up. I assume with FedNow (same as if I were to transact using debit cards), money leaves my bank account more or less immediately when a charge happens. That m…

That fear isn't irrational at all (at least, it wasn't). About 20 years ago, I had a debit card number stolen and my account was cleared out. It took about a month to get resolved an, in that time, I had some very unpleasant conversations with quite a few people including my landlord about my inability to pay my bills. In the grand scheme, I suppose it didn't harm me--but it was an extremely unpleasant situation to d…

If you want only an ATM card and not a debit card, you might be able to get one. Banks don't advertise it, but I got an ATM only card from Bank of America.

Re: Can the Visa-Mastercard duopoly be broken?

#155

Post by PaulDavisThe1st »

jrvarela56 wrote: post #84
philip1209 wrote: post #49

Fraud protection of credit cards is the root of modern e-commerce. In some ways, Visa and Mastercard are the privatized court systems of the internet. If I end up on a random, self-hosted ecommerce site and decide to make a purchase - what guarantee do I have that the item will show up or be as-described? If I bought something through a bank transfer, reversing that purchase would be incredibly difficult. And, suing…

This. My company does payment processing for small merchants and all the complexity of credit cards is rooted in this dynamic. - Consumers can pay stuff on credit - Consumers can 'chargeback' if they feel something went wrong These two mechanisms are the lubricant that provides a +% in online commerce greater than the % charged for processing payments.

> provides a +% in online commerce greater than the % charged for processing payments.

While possible, this is a claim made without evidence.

Re: Can the Visa-Mastercard duopoly be broken?

#156

Post by andersonmvd »

pkaye wrote: post #102
andersonmvd wrote: post #43

In Brazil many stores are dropping credit card and allowing only PIX (instant debit transfer) cause it's cheaper for business (0,22% avg transaction fee vs 1%-2% of credit cards - src (pt-only) https://g1.globo.com/economia/pme/noticia/2022/03/23/pix-e-m... ). The President of Brazilian Central Bank recently said that "credit cards will soon cease to exist" src (pt only) https://www.poder360.com.br/economia/campos-ne…

I presume instant payments don't have the chargeback feature of credit card? That is the main benefit I care about credit cards.

PIX does have a chargeback-like mechanism. It was introduced a year later its release though. PIX is actually more than just instant payment, it includes other things like Pix Saque (withdraw) and Pix Troco (change).

Src (pt only) https://www.poder360.com.br/economia/bc-libera-mecanismo-de-... and https://www.in.gov.br/web/dou/-/resolucao-bcb-n-103-de-8-de-...

Re: Can the Visa-Mastercard duopoly be broken?

#157

Post by JumpCrisscross »

dcolkitt wrote: post #123
lotsofpulp wrote: post #104

Earlier quoted context omitted.

I get a minimum 2.6% cash back on everything I purchase, but most things I get 3.5% to 5.25% cash back. There are a bunch of free 2% cash back credit cards, so people would at least break even if they wanted to.

Generally those types of deals require either parking six figures out liquid assets at the issuing bank and/or paying high annual fees (which of course favor the biggest spenders who amortize the cost over lots of volume). Either way the current system definitely favors the rich over the middle class.

> system definitely favors the rich over the middle class

This is correct. But it's a far cry from "nobody really has rewards." Framed a bit differently, our credit card system is a regressive tax on consumption.

Re: Can the Visa-Mastercard duopoly be broken?

#158

Post by einpoklum »

philip1209 wrote: post #49

Fraud protection of credit cards is the root of modern e-commerce. In some ways, Visa and Mastercard are the privatized court systems of the internet. If I end up on a random, self-hosted ecommerce site and decide to make a purchase - what guarantee do I have that the item will show up or be as-described? If I bought something through a bank transfer, reversing that purchase would be incredibly difficult. And, suing…

> Also, modern B2C SaaS is built on credit card subscriptions.

That seems like circular logic. If there were alternatives to credit card and CC companies, SaaS would use that. In fact, in some countries, there are and it does.

> The ability for a merchant to pull payments on a recurring basis from a credit card requires an incredible amount of trust.

Why? If the merchant can't pull this month's payment, then services stop. Perhaps you mean making a large payment in arrears?

Re: Can the Visa-Mastercard duopoly be broken?

#159

Post by csomar »

Enginerrrd wrote: post #96
hn_throwaway_99 wrote: post #58

Earlier quoted context omitted.

> Is it because some banks still depend on mainframes doing batch processing? Pretty much all banks use mainframes to do batch processing. "SFTP runs the world". I got heavy into fintech a couple years ago, and at first I thought "This is all insane." I was coming from a SaaS world where it's easy to think about transactional guarantees with API calls. I finally "got it" when I realized that pretty much all of our fi…

>I'm no fan of crypto, but the one place where I can see real utility for blockchain is as a backend settlement service for banks. So... what does the crypto provide there that a simple authenticated communication protocol with a few redundant centralized servers doesn't?

A blockchain will allow all these operators to transact safely. It's really just more secure because it's open (otherwise very quickly compromised). And blockchain tech has shown to be reliable when it comes to up-time and security (if you keep it simple).

Re: Can the Visa-Mastercard duopoly be broken?

#160

Post by kube-system »

PaulDavisThe1st wrote: post #146
julienb_sea wrote: post #136

Earlier quoted context omitted.

The benefit of credit cards is no one can literally drain your bank account via fraudulent access to a payment card directly tied to your bank (i.e. debit card in US nomenclature). This is a clear benefit regardless of location. Courts are slow and not scalable, and you don't want to be in a scenario where your bank has been drained right before you need to make important payments.

This does not negate the parent post at all. You're just describing another deficiency of the US banking system.

There are always scams and exploits. Legal consumer protections are necessary regardless.
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