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Visa and Mastercard: The global payment duopoly (2024)

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Re: Visa and Mastercard: The global payment duopoly (2024)

#191

Post by srivmo »

The article underplays the role stablecoins are going to play in the next 10 years. Compared to 6+ intermediaries in a standard SWIFT payment, a cross-border payment facilitated by USDC/USDT just needs 2 players - an on-ramp provider and an off-ramp provider. The result ⇒ insanely low costs, much lesser than 1-5% typically charged by a SWIFT payment.

This network is sustainable and running on established blockchains which have been running for over a decade now - ETH.

This network somehow needs to penetrate domestically too - something like a UPI. That moment is going to be a watershed moment that should break this duopoly.

PS: Its a separate matter altogether that Visa/Mastercard are trying to gel well into this new age infrastructure

Re: Visa and Mastercard: The global payment duopoly (2024)

#192

Post by bahularora »

What I find interesting is how India’s financial inclusion push under the Jan Dhan Yojana (National Financial Inclusion Mission) led to unexpected consequences.

The government aimed to offer zero-cost bank accounts to extremely low-income citizens and needed zero cost debit cards to make them functional. Rumor has it they asked Visa and Mastercard to waive fees and both declined. Even Indian banks reportedly pushed back.

So India doubled down on RuPay, its domestic card network. What started as a fallback turned into a fintech revolution. Over 559 million bank accounts were opened under this mission, most powered by RuPay.

Ironically, if Visa or Mastercard had agreed, RuPay might never have taken off.

Re: Visa and Mastercard: The global payment duopoly (2024)

#193

Post by nayuki »

Marsymars wrote: post #87
kristofferR wrote: post #47

Not a total duopoly, almost all cards in Norway are dual network - the local network BankAxept + Visa/Mastercard, the cheapest option (BankAxept) is selected invisibly for the users when possible while the cards still works flawlessly all places that only accept Visa/Mastercard globally. Big businesses only pay 0.0475% + ~0.003 USD per transaction for BankAxept: https://bankaxept.no/hjelp/priser-for-bankaxept 8/10 ca…

Canada has something similar (Interac), but the transaction marketshare has been steadily eroding to credit cards. (Since credit cards offer credit + credit/cashback, and extra fees for paying by credit cards are very rare.)

Interac is a debit network in Canada, and the merchant fees are impressively low. They're generally under $0.10 as a flat fee, not a percentage (credit cards would cost the merchant around 2%). https://www.interac.ca/en/payments/business/understanding-fe... , https://en.wikipedia.org/wiki/Interac

One consequence of the flat fee is that at some retail stores, if you pay by debit, you can ask for "cash back". For example, if you buy $20 of groceries and ask for $100 cash back, the cashier will charge $120 to your debit card, you will have fully paid for your groceries, and the cashier will give you $100 in paper money as if he were an ATM.

Obviously, "cash back" is a terrible idea if the merchant allowed the customer to pay by credit card.

Re: Visa and Mastercard: The global payment duopoly (2024)

#194

Post by whatevaa »

michaelmior wrote: post #190
thimabi wrote: post #49

Earlier quoted context omitted.

I got in this thread with the expectation of seeing a comment like yours, so thank you for that. I think what worries the U.S. more is the likelihood of Pix spreading around the world. It’s such a great public program that I believe many countries will eventually adopt it, or adopt some version of it. In fact, AFAIK some places already have it, like Thailand and Malaysia. Consumers like it because it is widely availa…

> Right now, the only thing that makes credit cards a better proposition is being able to pay without having enough money in the bank, and maybe enjoying greater protection from fraudulent merchants. Rewards is another big one and the reason I personally prefer to use credit cards where possible.

Rewards exist because credit card transaction fees to merchants are very high, though. Europe put a limit on those fees and no credit card rewards exist here.

Re: Visa and Mastercard: The global payment duopoly (2024)

#195

Post by skissane »

mitthrowaway2 wrote: post #176
habinero wrote: post #113

Earlier quoted context omitted.

Yeah, it's almost like porn isn't the problem, it's crime and chargebacks. All of those sites use high risk payment processors if they go through the major card networks.

I sincerely doubt that people are issuing chargebacks for Steam store purchases.

Our son kept on buying games using Steam and then getting refunds for them in order to buy another one instead

I told him to stop, because I was worried that too many refunds might result in Valve taking action against the account

Still, why bother with a chargeback when the vendor has a generous refund policy?

Re: Visa and Mastercard: The global payment duopoly (2024)

#196

Post by whatevaa »

Loughla wrote: post #154
55555 wrote: post #141

Earlier quoted context omitted.

I am in Thailand. Fraud is a much smaller issue because it’s a push-based system. You cannot withdrawal from someone else’s account just by knowing the number, unlike with credit cards.

What about fighting charges? In the US, if I flag a charge on my credit card it's immediately cancelled and they deal with it. How does that work?

What happens when it's so easy and people start abusing this system?

Re: Visa and Mastercard: The global payment duopoly (2024)

#199

Post by mirzap »

cornholio wrote: post #189
hahn-kev wrote: post #177

Earlier quoted context omitted.

They way it works I don't receive a charge like you do with visa, the merchant presents a code, you scan it when your bank app and then the bank app asks if you want to send # of money to [merchant name], if you don't want to pay it then you don't approve the transfer in your app on your phone. However after the fact there's less options, I've never gone through

Bundling consumer protection with the payment system was always a bad idea. Payments need to be instantaneous and free. The returns/refunds can be handled offline by a mutually agreed facilitator that does not have a monopoly on the payment system. You can also have a legal mandate that all internet purchase, for example, should employ such a service, that charges a market fee and is then liable for making fair decis…

It is not a bad idea. This is how it is supposed to be. My bank offers this even with Mastercard. I have to approve transactions when paying online. It's instant, I finish checkout, and then I receive the push notification asking me to confirm the transaction. I don't know if I would ever use CC in a country where banks don't allow this.

Re: Visa and Mastercard: The global payment duopoly (2024)

#200

Post by RataNova »

pavlov wrote: post #13

The credit card duopoly is another instance where the EU has done a good job with regulation, but everyone just takes it for granted until they’re reminded how much worse the rest of the world has it. In the EU, card payment fees are capped at 0.2% for debit cards and 0.3% for credit cards. In the US, these interchange fees are about 2%. US businesses pay over $100 billion annually in these fees to card networks. If…

It's a great example of how quiet, unsexy regulation can have a massive impact
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