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Forget Google, time to end the Visa-MasterCard duopoly

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Re: Forget Google, time to end the Visa-MasterCard duopoly

#61

I am reading so much incorrect information in this thread it’s maddening. The card network (Visa, Mastercard, etc) do NOT make money on Interchange. It’s hard to have a healthy dialogue on this topic if folks don’t understand the basics of how the card networks generate revenue. Below is a decent primer. https://www.investopedia.com/articles/markets/032615/how-mas...

Well they "do not" in the same sense inflation is "not" a tax on anyone holding cash, right?

One way or another every fee must be absorbed by someone that pays.

Re: Forget Google, time to end the Visa-MasterCard duopoly

#62
post #6

There is something that I've never managed to put my finger on: most companies as huge as Google / Apple / FB etc... or even more traditional ones (banks, oil, etc ...) are sort of "well known" in the sense that they do PR, they have well known figureheads, etc ... VISA has always struck me as a very nebulous entity, whose structure, governance, is not very well know by the general public. I wonder how they managed t…

Their leaders may not be well known, but they spend an absolutely massive amount of money promoting their brands. They are extremely recognizable.

Mastercard so much so that the recently removed their name from their logo as its nolonger needed.

Re: Forget Google, time to end the Visa-MasterCard duopoly

#64
Forget finance and tech, medical is under the tight grip of Physicians.

Every medical service requires paying a physician. And it's no trivial amount, its a huge expense. Further, any numbers on physicians salaries are horribly skewed because they don't consider specialists "physicians".

Re: Forget Google, time to end the Visa-MasterCard duopoly

#65
This has been a problem for a long time and unfortunately the outrage around the duopoly died out the last time we confronted it, which was in 2010 when Visa/Mastercard blocked Wikileaks (https://www.forbes.com/sites/andygreenberg/2010/12/07/visa-m...).

It is still a problem in 2020. Gab was recently impacted by Visa blacklisting them (https://news.gab.com/2020/06/19/gab-blacklisted-by-visa/) and also drew parallels to the realities of the "social credit score" system used in China (https://news.gab.com/2020/06/26/social-credit-score-is-in-am...). The vagueness of Visa's allegations stood out to me as problematic, given the lack of viable alternatives.

Ultimately, the lack of a provider who acts neutrally is a threat to freedom of speech and expression for all practical intents and purposes.

Re: Forget Google, time to end the Visa-MasterCard duopoly

#66
post #31

Earlier quoted context omitted.

That stat won't change much in the US. It's illegal for a store to turn down cash.

That's a myth: https://www.federalreserve.gov/faqs/currency_12772.htm Private companies can refuse cash.

if you owe a business money, you can pay the debt in cash.

Re: Forget Google, time to end the Visa-MasterCard duopoly

#67
post #3

While I agree with the sentiment, things have certainly opened up lately quite a bit with the mainstream-ization of the crypto currencies. One could conceivably avoid Visa / MC in a way that just wouldn't have been possible before. Visa / MC remind me a bit of Ticketmaster in that they've got parties on both sides defending them because of kickbacks. You charge the merchant the "interchange fee" plus some amount and…

I'm not seeing a "mainstream-ization of the crypto currencies". A few years ago, quite a few local businesses were experimenting with accepting cryptocurrency payments, and I could buy all kinds of stuff and services using bitcoin. I could order a pizza with bitcoin, I could buy electronics at a major retailer, I could buy plane tickets, I could pay for lunch in a local cafe.

That's not the case any more, by now all these local companies have stopped accepting bitcoin, because after the first hype, the volume simply was not there to make it worth their while. Some people (often the same people!) bought some stuff initially to try it out, but that was it, there was no sustainable mainstream business. It's still usable for some online services targeting the tech crowd, especially where anonymity might be a feature, but for everyday use of paying for physical goods and in-person services there has been the opposite of "mainstream-ization" in my experience; by now the mainstream businesses have tried crypto and found it not useful. There's enough well developed infrastructure and service providers so that mainstream businesses could easily accept cryptocurrencies if they wanted, but they don't, because there's no significant customer demand outside specific niche markets.

Re: Forget Google, time to end the Visa-MasterCard duopoly

#68

There is literally direct competition with Amex. Sure not everywhere takes amex but the majority do, and you can speak with your dollars (and still hold Visa / MC in case amex fails you). Consumers derive huge benefit from the safety, consistency and reliability of the networks Visa and MasterCard have built out, and yes the consolidation is a certain price to pay for that. These companies invest billions into anti-f…

American Express is not the answer. Let's not replace bad for worse.

Re: Forget Google, time to end the Visa-MasterCard duopoly

#69
post #57
post #44

Earlier quoted context omitted.

"The 2% cashback has to come from somewhere." Yes, but in reality, the program comes from an upside down approach to overcoming the obviously anti-competitive practices that VISA/MC use to forbid retailers from offering discounts for not using VISA etc.. You can't say "Get 2% if you use cash instead of VISA". (Notice that nobody ever advertises that?) Because VISA doesn't allow it. You also can't say "$1.99 + 20 cent…

Like some kind of virtual coin.

The ability to purely make transactions is trivial - you can just use a debit card. The value of credit cards comes from other factors like fraud protection, SCI compliance, actual credit, etc.
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