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

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

#251

Post by jandrewrogers »

e63f67dd-065b wrote: post #49
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…

As a sidenote I hate that sales tax is not shown on the price tags here in the US. I strongly believe that you should be able to walk out of the store paying the price shown on the price tag -- not a cent more. This obviously clashes with the obvious solution of making credit card surcharges a thing and letting consumers deal with it. I genuinely don't know what's the best solution here -- I think the EU did a good j…

The reason sales taxes are not posted is at least in part because there can be several independent authorities that can and do change the sales tax on a whim. The sales tax you pay is the aggregate of these separate authorities. There is no central sales tax authority that keeps these changes on a sane and sensible cadence, which is one of the reasons sales tax is highly variable and hyper-local in the US.

In this scenario, it is much easier to change the sales tax at the register than to reprice the entire store every time one of the several sales tax authorities decides to change the rates or rules.

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

#252

Post by yamtaddle »

Semaphor wrote: post #163
Osiris wrote: post #141

Earlier quoted context omitted.

That’s not the case on the US (tax is added after the fact) and there hasn’t been a massive switch to cash. Convenience is a powerful thing.

And people in Europe are usually puzzled why you’d have such a crazy system, yes.

The two of my (American) kids who've gotten old enough to buy stuff on their own, even if it's just us sending them into a convenience store with money for something, have immediately recognized this system as idiotic, and they frequently complain about it. It's so plainly-stupid that, literally, even a child can see it.

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

#253

Post by vetinari »

carlosjobim wrote: post #240
Symbiote wrote: post #235

Earlier quoted context omitted.

Very few people pay the fee, most people pay with a debit card or cash. People trying to get air miles, cashback or similar have to pay the cost of that.

Visa electron/maestro are they debit cards now? Back in the day they were only for ATMs and very few businesses. Don't most people have the normal visa/mc debit cards there?

> Back in the day they were only for ATMs and very few businesses.

That was pretty much specific to German-speaking countries (or at least they were the only one, where I noticed that). Elsewhere, there was no such thing as ATM-only card (or even ATM-only PIN).

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

#254

Post by qwytw »

carlosjobim wrote: post #240
Symbiote wrote: post #235

Earlier quoted context omitted.

Very few people pay the fee, most people pay with a debit card or cash. People trying to get air miles, cashback or similar have to pay the cost of that.

Visa electron/maestro are they debit cards now? Back in the day they were only for ATMs and very few businesses. Don't most people have the normal visa/mc debit cards there?

> Visa electron/maestro

Don't even exist in many places anymore. e.g. in the EU country where I live both were replaced ~8 or so years ago by Visa/Mastercard Debit (since they removed embossed characters the only way to distinguish them is the word 'debit' written in a tiny font.

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

#255

Post by petre »

Symbiote wrote: post #198
netheril96 wrote: post #178

Earlier quoted context omitted.

In China most payments cannot be reversed. By contrast, the security of payment methods are much more stringent in China. I was surprised when I first learnt that you could spend money online with a VISA card by only card number, expiration date and a 3(!) digit CVV. Those are hardly secure and printed out on the card that anyone can see. Then the US merchants have so many rules about fraud detection but all of them…

Many of the large American companies involved in payments (Visa, MasterCard, Stripe, Square, PayPal) also operate in Europe, and implement the modern security practices required here. 2FA for credit/debit payments made online, for example, and chip payments since... 2004 or something.

Stripe and Paypal are annoying. They refuse payments with virtual debit cards, debit cards issued in other jurisdiction than your shipping (or IP?) address, etc. I'm usually put off when I see a Stripe or Paypal checkout screen.

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

#256

Post by qwytw »

ivan_gammel wrote: post #154
Osiris wrote: post #141

Earlier quoted context omitted.

That’s not the case on the US (tax is added after the fact) and there hasn’t been a massive switch to cash. Convenience is a powerful thing.

Consumer behavior in different countries is different and depends on many factors - culture, mindset, local customs and habits, structure of taxes and regulations etc. American system will not be convenient for Germans, for example (I personally do not understand how it can be convenient).

> personally do not understand how it can be convenient

It can be very convenient for retailers since sales can vary in different counties let alone states:

https://en.wikipedia.org/wiki/Sales_taxes_in_the_United_Stat...

just try to imagine what a mess it would be if any advertisement, price sticker etc. would have to show the full price.

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

#257

Post by qwytw »

Semaphor wrote: post #163
Osiris wrote: post #141

Earlier quoted context omitted.

That’s not the case on the US (tax is added after the fact) and there hasn’t been a massive switch to cash. Convenience is a powerful thing.

And people in Europe are usually puzzled why you’d have such a crazy system, yes.

Because sales taxes are ussually set by the local jurisdiction.

So it could 10.25% in one place, 9.75% in the next town 8.750% and 8.975% if you drive for another 15-20 minutes. Imagine if you run a business, have multiple locations and want to buy a TV/Billboard/etc. ad with the price how would that work? You'd also need to make different price stickers, won't be able to print the price on the packaging etc.

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

#258

Post by mercutio2 »

rhaway84773 wrote: post #211
Symbiote wrote: post #198

Earlier quoted context omitted.

Many of the large American companies involved in payments (Visa, MasterCard, Stripe, Square, PayPal) also operate in Europe, and implement the modern security practices required here. 2FA for credit/debit payments made online, for example, and chip payments since... 2004 or something.

American payment systems are shockingly outdated and have been so for decades.

Just because things are different doesn’t mean they’re “outdated”.

The optimal amount of fraud is not zero. Merchants, and consumers, both benefit from the equilibrium where there is much more commerce, backstopped by bank fraud detection.

Credit card fraud is just not a large problem in the US, and the extra commerce encouraged by continuing to use a relatively insecure system generally outweighs the benefits of tightening security.

Tokenized NFC payments are even more convenient than swiping credit cards, and they’re gradually replacing the old system, but there is no urgency here.

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

#259

Post by Pxtl »

cashmonster wrote: post #82
Pxtl wrote: post #72

Earlier quoted context omitted.

Why? If the merchant is paying an extra 1-2% for your purchase in cc transaction fees, why should they be expected to eat the cost? Why should your service be subsidized by people whose transactions don't have that overhead?

They are paying even more to manage cash but don’t have a separate fee for it. Why should credit card users subsidize that? (Personally I think it’s fine to charge any which way you want as long as your terms are clear. But I think this answer makes clear it’s not so obvious as you suggest?)

Bank of Canada studied it and found that credit costs were over double the cash costs. Debit is the lowest-cost option for merchants.

https://www.bankofcanada.ca/wp-content/uploads/2017/11/boc-r...

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

#260

Post by computing »

Broken_Hippo wrote: post #202
carlmr wrote: post #167

Earlier quoted context omitted.

But still OP's point stands. If the VAT was more visible, people might be less accepting of it, like with credit card fees.

I'm in Norway. There is no real way to avoid knowing what the VAT on things are. I have to pay it if I order from Amazon or Etsy, for example. If I order from the US, I pay later. Every sales receipt has the VAT right on the receipt. I can see it every single time. If I order from inside the country, I can see it before I pay. It isn't hidden. It isn't secret. It wasn't even secret to an immigrant that didn't yet und…

I think this comes down to you being Norwegian (ie getting good quality govt services in exchange for your taxes). Now imagine being Greek. If folks realised they're paying 22.5% to the govt on top of everything they purchase... they wouldn't be very happy.
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