Hacker News Board Hacker News, browsed like a classic message board
Live data from Hacker News

Credit-Card Backlash Mounts as Kroger Weighs Expanding Visa Ban

bloomberg.com

Post reply on HN
Print view View original

161–170 of 389 posts

Re: Credit-Card Backlash Mounts as Kroger Weighs Expanding Visa Ban

#161

Post by amsilprotag »

kccqzy wrote: post #94

Relevant: due to Ohio v. American Express , merchants are generally unable to steer customers from using a particular card. For example if a merchant accepts Visa at all, the merchant has to accept all Visa cards, not selectively choose the lower-fee cards; the merchant also cannot tell the customer to use Discover instead to save costs and only use Visa if that's the customer's only card. This anti-steering provisio…

AmEx was one of Warren Buffet's earlier investments, and a proof-of-concept of investing in companies with defensible moats. This ruling comes 55 years after his initial investment, and the moat feels as deep as ever.

Later businesses have perfected the art of winning the customer relationship and solidifying their lead with hardball terms for vendors (Walmart), merchants (Amazon), advertisers (Facebook/Google), developers (Apple/Google) and contractors (Uber).

Re: Credit-Card Backlash Mounts as Kroger Weighs Expanding Visa Ban

#162

Post by Symbiote »

Nursie wrote: post #145
jamie_ca wrote: post #122

Earlier quoted context omitted.

I believe it. My MasterCard is 2% cashback (through points, but that just means I batch it), but has an annual fee of $150 for two cards, and a minimum household income. I need to spend $7500 on the card just to break even, but if I funnel nearly all my expenses through the card I can net $1000 or more a year. These "rewards" come from the merchant, in the form of higher fees, and because the merchant can't discrimin…

This sounds very weird to this european.... but that's probably because fees here are capped at 0.3% and AFAICT there's not really such thing as a cashback card. (I think they used to exist, just not any more)

Careful generalising the whole EU on stuff like this. These cards were very common in the UK until the new rules limiting fees were introduced.

It looks like there are still a few: https://www.moneysavingexpert.com/credit-cards/cashback-cred...

Re: Credit-Card Backlash Mounts as Kroger Weighs Expanding Visa Ban

#163

Post by dylan604 »

toomuchtodo wrote: post #104
kevin_thibedeau wrote: post #96

Earlier quoted context omitted.

Wal-Mart has had success with forcing debit transactions to withhold merchant fees.

They’re also trying to push Walmart Pay as well. At their scale, it’s worth it. Despite the pain, I still think Walmart should’ve acquired and rebranded a bank, and offered financial products. Would do wonders for the unbanked, while keeping their transaction fees down.

> They’re also trying to push Walmart Pay as well.

I wonder whatever happened to that digital pay system pushed by WalMart that was supposed to be on the level of ApplePay? There was a lot of chatter about it around the time of the release of ApplePay, but I haven't seen much about it since. It was some weird transaction process, open the app, present QR code, do something else on app, re-present QR code or something along those lines.

Re: Credit-Card Backlash Mounts as Kroger Weighs Expanding Visa Ban

#164

Post by so33 »

stickfigure wrote: post #154
kccqzy wrote: post #94

Relevant: due to Ohio v. American Express , merchants are generally unable to steer customers from using a particular card. For example if a merchant accepts Visa at all, the merchant has to accept all Visa cards, not selectively choose the lower-fee cards; the merchant also cannot tell the customer to use Discover instead to save costs and only use Visa if that's the customer's only card. This anti-steering provisio…

It has been asserted elsewhere in this HN discussion that Visa charges merchants higher amounts for transactions with higher-end rewards cards. Assuming this is true, and these anti-steering provisions prevent merchants from discriminating, what prevents Visa from issuing cards with 200% fees? What's holding the cash back level at a mere 1-2%?

Competition with MasterCard, Discover, and Amex should hold them back from doing this, because at such punitive rates merchants would definitely stop accepting them.

I believe Amex is only able to get away with its highest-in-the-industry rates because of the association of Amex cards with business expense accounts and high income earners. This is changing now (https://www.ft.com/content/715d785e-23fc-11e8-ae48-60d3531b7...) especially after years of competition from banks like Chase, who have been working on creating what is essentially a structural clone of American Express’ network (https://www.reuters.com/article/us-jpmorganchase-creditcards...).

Re: Credit-Card Backlash Mounts as Kroger Weighs Expanding Visa Ban

#165

Post by jpatokal »

In Australia, despite the credit card companies and banks fighting tooth and nail against it, it's legal for merchants to charge credit card fees and the fees have to be proportionate to the actual merchant cost.

https://www.accc.gov.au/consumers/prices-surcharges-receipts...

Unsurprisingly, nobody uses AmEx or Diners here, because nobody's keen on paying 2% surcharges.

Re: Credit-Card Backlash Mounts as Kroger Weighs Expanding Visa Ban

#166

Post by function_seven »

timr wrote: post #102
function_seven wrote: post #45

Earlier quoted context omitted.

They do. https://www.helcim.com/us/visa-interchange-rates/

Those are the rates paid by the processor to the bank. They're not the rates paid by the business to the processor. Per VISA's website: "Merchants do not pay interchange reimbursement fees—merchants negotiate and pay a “merchant discount” to their financial institution that is typically calculated as a percentage per transaction." https://usa.visa.com/support/small-business/regulations-fees... It seems logical that V…

Visa might not want that, but the merchant provider I linked to offers it as "Interchange+ Pricing"

> Our cost-plus pricing helps you save.

Thet's Helcim's model. They charge whatever their own cost is, plus a margin.

And you can bet that any merchant as large as Kroger won't accept a flat rate or fee for their transactions. They want to pay as little as possible.

Re: Credit-Card Backlash Mounts as Kroger Weighs Expanding Visa Ban

#167

Post by wiredfool »

MrEldritch wrote: post #127
toomuchtodo wrote: post #104

Earlier quoted context omitted.

They’re also trying to push Walmart Pay as well. At their scale, it’s worth it. Despite the pain, I still think Walmart should’ve acquired and rebranded a bank, and offered financial products. Would do wonders for the unbanked, while keeping their transaction fees down.

I seem to recall from a previous discussion about the possibility of Amazon buying a bank that such an arrangement would be extremely illegal. IIRC, there's a law expressly prohibiting any company from both acting as a bank and a retail business. edit: Yep, there is. The Bank Holding Company Act prevents companies in commerce from engaging in banking activities.

How did Sears do it with Discover, or is this a recent thing?

Re: Credit-Card Backlash Mounts as Kroger Weighs Expanding Visa Ban

#168

Post by jeffwilcox »

smileysteve wrote: post #142
entee wrote: post #5

Earlier quoted context omitted.

I wonder if Apple and others that can generate "soft" credit cards could make this (essentially 1 card per merchant) work pretty easily and seamlessly for consumers. I don't know what underlying infrastructure they have though, are they still heavily dependent on Visa/Mastercard/Amex networks under the hood to do the dirty work or do they have a parallel system?

Your summoning of Apple is funny because one reason many merchants disabled NFC is because Apple tacked on an additional fee for those purchases.

Apple gets a cut of the intercharge fees that the banks charge (much higher in the US than overseas), but it is not an additional fee to the merchant last I researched.

A lot of the NFC issues were either competing tech, payment networks not being ready, people not understanding their system configuration, _or_ intercharge fees being different for that whole category of fees (not specifically Apple Pay).

Re: Credit-Card Backlash Mounts as Kroger Weighs Expanding Visa Ban

#169

Post by bit_logic »

This seems like a missed opportunity for Google Pay and Apple Pay. Before smartphones and NFC, it would've been too much for every merchant to make their own card, nobody is going to carry that many cards.

But imagine if Target, Walmart, Best Buy, etc. made store cards and they all integrated with Google/Apple Pay. When a customer enters the store, the app could automatically pick the right card. Google and Apple just needs to be cheaper than the rates charged by Visa/MC/Discover/Amex.

For example, I have a Target Redcard. Why isn't this card integrated with Google/Apply Pay? They've already setup the financial infrastructure to extend credit to customers. It should be a small step to add this to Apple/Google Pay.

Re: Credit-Card Backlash Mounts as Kroger Weighs Expanding Visa Ban

#170

Post by Symbiote »

northwest66 wrote: post #157
ams6110 wrote: post #134

Earlier quoted context omitted.

My barber doesn't take cards at all. Cash or check only.

Do you mean one of those things they write on paper slips when you say check? Which country are you from?

The American spelling of cheque is check, and they're still very common there. That's exactly what they mean.
Post reply on HN