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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)

#51

Post by BizarroLand »

rprend wrote: post #30

Speaking as someone who tried (and failed) to build a competitor, merchants don’t actually care about the fees. We built a mobile payment system using bank transfer rails (ACH debits and FedNow credits) for ecom platforms. QR payments, just like AliPay, but for the US. We studied past failures at this same idea, and targeted specifically high ticket items (jewelry, luxury), because the fees are a bigger problem, and…

I think the other issue is that "crypto" is not "money". There is no card I can carry that I can take to an ATM and convert crypto to money knowing before I left my house that day exactly how much I would get down to the penny.

Crypto has value the way Gold or pawnable items do, and until that barrier has been crossed the people will never embrace crypto as an alternative to cash and credit.

Realistically the only way for that to happen would be if the US replaced their currency with a government backed crypto, but that is unlikely to happen without a coup.

Visa and MC could still offer lines of credit in such a system but they would not be the primary purveyors of capital motility and therefore their entire business model would collapse or require extensive restructuring.

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

#52

Post by Detrytus »

TMWNN wrote: post #48
itake wrote: post #15

Earlier quoted context omitted.

Is there information on EU vs US credit limits? How do the account fees compare between EU and US?

>Is there information on EU vs US credit limits? I would be very interested in this as well. My understanding is that cashback cards of the type we have everywhere in the US (e.g. Amazon Amex = 5% back on Amazon purchases, Wells Fargo Active Cash = 2% back on everything) don't exist elsewhere. Another example: I just earned $1000 from Chase Sapphire as a new customer bonus for diverting $5K of the spending I would do…

That's just your bank giving back some (but not all) of those 2+% interchange fees.

Basically, in EU you have low fees, so credit cards are boring, they offer almost zero perks (because there's no money to finance those). No one really cares about what brand of card they get, only about their credit limit. In the US you are charged high fees on every purchase, and then the bank uses your own money to bribe you, or encourage particular types of (excessive) spending, or just make you addicted to credit card debt.

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

#53

Post by LaGrange »

greenavocado wrote: post #5
everyone wrote: post #3

The fucked up thing is how they are enforcing archaic puritan ideals on the whole world. Acting as self appointed global censors. (Eg. not allowing adult games on Steam or Itch.io) The most confusing thing for me is why. I have read a few theories, but nothing convincing. What could be a strong enough motivator to do such a bizarre thing? Also we need governments to keep them in line. We cant have private corps actin…

This is the wrong question to ask. The right question to ask is what is preventing other payment processors from seamlessly getting in front of the customer, at every retail location, and online? If other payment processors existed and were allowed to flourish, we would not give a damn if these two blocked 90% of transaction types. Instead, something is suffocating innovation and personal freedom.

It's the very same payment processors stifling that "innovation," though. You can't invisible hand yourself out of this one.

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

#54

Post by orangea »

rprend wrote: post #30

Speaking as someone who tried (and failed) to build a competitor, merchants don’t actually care about the fees. We built a mobile payment system using bank transfer rails (ACH debits and FedNow credits) for ecom platforms. QR payments, just like AliPay, but for the US. We studied past failures at this same idea, and targeted specifically high ticket items (jewelry, luxury), because the fees are a bigger problem, and…

> targeted specifically high ticket items (jewelry, luxury)

My immediate instinct upon reading this is "of course those businesses wouldn't be interested". They are selling a brand and image first, and if it looked like they wanted people to download some new app and put in their bank details to make a purchase instead of swiping a credit card it would cheapen the brand. Luxury stores are all about a streamlined experience and the appearance that money is no issue.

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

#55

Post by TMWNN »

Detrytus wrote: post #52
TMWNN wrote: post #48

Earlier quoted context omitted.

>Is there information on EU vs US credit limits? I would be very interested in this as well. My understanding is that cashback cards of the type we have everywhere in the US (e.g. Amazon Amex = 5% back on Amazon purchases, Wells Fargo Active Cash = 2% back on everything) don't exist elsewhere. Another example: I just earned $1000 from Chase Sapphire as a new customer bonus for diverting $5K of the spending I would do…

That's just your bank giving back some (but not all) of those 2+% interchange fees. Basically, in EU you have low fees, so credit cards are boring, they offer almost zero perks (because there's no money to finance those). No one really cares about what brand of card they get, only about their credit limit. In the US you are charged high fees on every purchase, and then the bank uses your own money to bribe you, or en…

>That's just your bank giving back some (but not all) of those 2% interchange fees.

On the contrary, for someone like me who pays off my balances each month, if I get 2% back for every transaction, I am breaking even on those fees if assuming that I pay 100% of the fees, which of course isn't true; the merchant pays some of that. So really, I come out slightly ahead.

For something like the Amex I mentioned with its 5% back on Amazon, I am coming out well ahead.

> and then the bank uses your own money to bribe you, or encourage particular types of (excessive) spending, or just make you addicted to credit card debt.

Oh, good grief. So EU credit card companies don't do this? I had no idea they offered cards purely as a charitable venture.

I love how you stacked up all those sins just on the US side. Keep this sort of /r/AmericaBad nonsense out of HN.

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

#56

Post by criemen »

867-5309 wrote: post #29
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…

that's only a very recent change, and not universally rolled out. for decades shops charged ~£3 "connection fee" for paying by credit card, no matter the purchase amount, and many still (probably illegally) enforce a minimum spend if paying by credit or debit card. like when paying or withdrawing money abroad, it's just a lottery as to the "fees" you'll be charged not because there are such fees, but because someone…

Visa and Mastercard have a net profit margin in the order of 50%. Do you think that's justified for the service they're providing, and is indicative of a healthy market/competition?

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

#57

Post by [deleted] »

Telemakhos wrote: post #26
topdan wrote: post #12

China is a footnote in the article, but their story here is interesting. China's WTO accession commitments in 2001 agreed to open its financial services sector, including payment card services, to foreign companies, except they never did. The US sued (presumably on behalf of VISA and MasterCard) and won in 2012: https://ustr.gov/about-us/policy-offices/press-office/press-... MasterCard just started being full offered…

Not only have they avoided the duopoly: they've avoided dependence on US tech and US financial surveillance/control. The EU depends on Visa/Mastercard for cross-border transactions especially, and they've never been able to get their act together well enough to establish a home-grown, EU-wide payment rails system that would give them independence from US processors should they need that independence. That's a lesson…

[deleted]

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

#59

Post by Detrytus »

TMWNN wrote: post #55
Detrytus wrote: post #52

Earlier quoted context omitted.

That's just your bank giving back some (but not all) of those 2+% interchange fees. Basically, in EU you have low fees, so credit cards are boring, they offer almost zero perks (because there's no money to finance those). No one really cares about what brand of card they get, only about their credit limit. In the US you are charged high fees on every purchase, and then the bank uses your own money to bribe you, or en…

>That's just your bank giving back some (but not all) of those 2% interchange fees. On the contrary, for someone like me who pays off my balances each month, if I get 2% back for every transaction, I am breaking even on those fees if assuming that I pay 100% of the fees, which of course isn't true; the merchant pays some of that. So really, I come out slightly ahead. For something like the Amex I mentioned with its 5…

> So EU credit card companies don't do this?

No, as I said, they don't because of the interchange fees limit: they simply don't have money to finance any perks. Sometimes you get travel insurance, with the card that charges 200 EUR annual fee, sometimes you get some rewards program, where you collect the points, but those points are typically valued at 0.0001 cent, so no one really bothers earning them. Credit cards in Europe are really boring, commodity products, not status symbols or coupon books.

> assuming that I pay 100% of the fees, which of course isn't true; the merchant pays some of that.

You are paying that one way or the other: merchant will pass their fees on you by raising prices.

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