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Credit-Card Backlash Mounts as Kroger Weighs Expanding Visa Ban

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

#291

Post by mmirate »

cycrutchfield wrote: post #85
bostonvaulter2 wrote: post #81

Earlier quoted context omitted.

I wish credit card fees would come down, they're ridiculously high and increase the price of doing business, which increases the prices you pay for items.

Most people that care get a substantial portion of those fees back (either as cash or rewards). So in reality, those fees are a tax on the poor, the un-creditworthy, and the financially illiterate.

> tax on the poor, the un-creditworthy, and the financially illiterate.

Taxation is glorified theft, but in this case I don't care because these are acceptable targets.

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

#292

Post by gruez »

what-the-grump wrote: post #277
smileysteve wrote: post #136

Earlier quoted context omitted.

I don't buy this because it discounts the high costs of cash controls. Cash has high costs that likely make electronic forms of payment competitive. You have - Employees skimming the till; - Theft insurance for a safe, the nightly amount in the safe - Managers balancing the cash registers with change/safe - Armored trucks picking up the money (2-3 men guarding the transfer) - Banks processing the money - Employee tim…

Not really. 2% on your gross is a lot and any standard commercial policy will cover cash on hand. 50% of the country is broke, 80% live pay check to pay check. Many working minimum wage, low income bracket do not have bank accounts. The idea that cash is ‘hard to operate’ is a stretch, we’ve been exchanging currency for as long as commerce existed. If you handle enough cash to need an armored truck, you are far above…

>50% of the country is broke

what is meant by this? is this the often cited "50% of Americans don't have any savings" number?

in savings accounts only

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

#293

Post by Nasrudith »

alkonaut wrote: post #209
llewey wrote: post #208

Earlier quoted context omitted.

That is definitely not true in Germany. There were many places that only accepted cash while I lived there. I just spent 2 weeks in Spain and there were many places I tried to eat that were cash ø ly. In Chinatown in London, as well, many places are cash only. "outside the US" is a big place, be careful to be more specific.

I know - I went to Berlin and noticed Taxis wanted cash and would not accept cards. Was like traveling 20 years back in time. I did not mean to say all places outside the US

That is common with taxis for some reason - probably transaction fees, processing lag time or tax evasion. I know some cities had to pass "broken" card readers are free laws to discourage taxis that claimed to accept cards but really don't.

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

#294

Post by dalbasal »

randomsearch wrote: post #199
amsilprotag wrote: post #161

Earlier quoted context omitted.

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), deve…

Very interesting quote from Musk: “saying you like moats is another way of saying you like oligopolies”. I like Musk’s focus on innovation, and I also thought this was interesting because it came from one of the PayPal+ group.

To bring in another PayPal toe-in... Peter Thiel made some waves when he said the whole point of being a business is to create a "monopoly." His definition of "monopoly" is more similar to Buffet's "moat" than the legal definition of "monopoly."

There's something very valuable in those guys' intentionally provocative choice of words.

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

#295

Post by thisone »

Nursie wrote: post #173
Symbiote wrote: post #162

Earlier quoted context omitted.

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...

I live in the UK, and that's kinda what I mean - since that rule was brought in, such things are basically unheard of. The most you can get these days seems to be Avios or Amex rewards points.

If you're looking for cashback cards, you may want to look around again on Money Saving Expert. They are definitely available and without a fee. They aren't huge percentages, but if you're only other choice is an airline card and you don't travel enough to make use of the miles, may as well get the cash.

Heck, when MBNA recently lost all it's airline business, the card they switched you to is actually quite decent. A bit of cashback and free Mastercard rate foreign transactions.

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

#296

Post by clan »

mrweasel wrote: post #280
clan wrote: post #253

Earlier quoted context omitted.

The exact same is happening in Denmark. The huge players are under fire from new fintech startups. It has been amazing to see how fast such apps gain penetration in the market.

Honestly I can't think of a single fintech startup in Denmark that's is any competition to the banks and card companies. The only two apps that really have any penetration is MobilePay, but that's the large banks, and eDankort, but that's NETS. There are a fintech startups, but they all work with or for the large players.

Due to regulations I think it is difficult to find any fintech which a small bootstrapped startup in the traditional sense. Some bank tie-in is needed. And by that I might be overloading the startup moniker.

My point was that they're still tiny compared to the giants such as AmEx or Visa. And it shows that the old players can be unseated faster than expected.

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

#297

Post by dragonwriter »

dalbasal wrote: post #294
randomsearch wrote: post #199

Earlier quoted context omitted.

Very interesting quote from Musk: “saying you like moats is another way of saying you like oligopolies”. I like Musk’s focus on innovation, and I also thought this was interesting because it came from one of the PayPal+ group.

To bring in another PayPal toe-in... Peter Thiel made some waves when he said the whole point of being a business is to create a "monopoly." His definition of "monopoly" is more similar to Buffet's "moat" than the legal definition of "monopoly." There's something very valuable in those guys' intentionally provocative choice of words.

> His definition of "monopoly" is more similar to Buffet's "moat" than the legal definition of "monopoly."

There isn't really a difference: the whole point of a Buffet “moat” or a Thiel “monopoly” is avoiding commoditization and competition, which naturally tends to drive sale price down to marginal cost eliminating profits. That is, they are about retaining pricing power.

Pricing power is also the key test for the existence of legal monopoly, since the existence of pricing power indicates that there are no actual substitutes in practice, even if there appear to be alternative products in the same descriptive market.

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

#298

Post by endorphone »

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%?

Everyone would immediately stop taking all Visas.

They charge what they can get away with, and generally they can, or rather could, get away with the higher rates. A couple of percentage points was worth it if it made the sale, especially if there was a high likelihood that your customer only had that one method of payment. Now almost everyone has multiple cards, and many retailers are pushed to much lower margins, so we see the results that we see.

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

#299

Post by sokoloff »

rahimnathwani wrote: post #178
sokoloff wrote: post #97

Earlier quoted context omitted.

The average profit margin for a mainstream grocer (like Kroger) is 1-2 percent. It's a low-margin, high-volume business. Said differently, it's exactly the type of business that I'd expect to care deeply about transaction fees.

https://ycharts.com/companies/KR/gross_profit_margin >20% gross margin

Yes, and typically 1-2% net margins.

https://www.macrotrends.net/stocks/charts/KR/kroger/profit-m...

Saving money on transaction fees is exactly what would drive an increase in net profit margin.

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

#300

Post by caspper69 »

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 tried. IIRC they were going to buy Green Dot outright, but they were rebuffed by regulators.

So instead they took a small ownership position <5%, in order to avoid the reporting and regulatory hassles while still getting sweetheart deals.

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