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34 little POS machines (svedic.org)
61 points by ZeljkoS on Jan 30, 2016 | hide | past | favorite | 15 comments

It would have been more interesting to examine why other locations don't see such a proliferation of card readers or ATMs. That might not have made such a fiery match for the burning of "extreme libertarian" strawmen (because libertarian paradise Croatia), but it would have been plausibly constructive rather than simply polarizing.

The real questions here are why is this so rare in other places and why did it happen in Croatia? I wish the article had asked those questions.

The example with ATMs happens in a lot of places I've been but I'll just list Japan as the most extreme example.

Wow there's a great irony in that you used the NYC Subway system as an example. When there were three different independent companies they competed hard for customer's business, provide punctual service and fare increases were generally flat or at least in line with inflation. Now that the Subway is owned by the city it is a monopoly with large fare increases every two years, increasingly piss poor service, permanent budget problems, shadowy book keeping, and the victim of all kinds of politics and cronyism that were completely unknown when the system existed as private run entities. The NYC Subway is an example of an absurdity that is equivalent to the 42 different POS devices in that picture not a contrast to it.

Which mass transit systems outperform NYC's?

Many POS machines lately have a bank selection screen at the start. although banks are pretty interconnected, they have ridiculous fee differences between their cards and other banks'.

What a terrible article, full of pseudoscience and pseudohistory.

Businesses charging for access to their networks has absolutely nothing to do with the endowment effect. There isn't some sort of "my network is better than yours" ego trip going on just because someone charges you to use their network. Their networks are products; they have infrastructure, maintenance, marketing, advertising. You don't give away your products for free, why should they? And if the expectation was that they should give away their network for free, who would ever care to build the network? Why incur those costs if you can just rely on someone else to build it for you?

Capitalist businesses have totally overcome this problem (despite any possible "my network is better than yours" biases) in many markets, most notable internet infrastructure. You can physically see it in action at Internet Exchange Points, where networks of different sizes and values meet together to exchange access to each other's networks.

My bank lets me use any ATM anywhere in the world without an ATM fee. They do this by refunding any ATM fees that other banks may charge. Why would they do this? Because then they don't have to build and maintain a network of ATMs, and they have happier customers because of it.

The subway example ignores vast swathes of actual history, starting with the very fact that the IND lines didn't exist for 30 years until after the turn of the century. And yes, their networks' tunnels were incompatible between lines, but then again, so are the networks of every other subway of the era, even the ones built by governments. And their demise and eventual merger had nothing to do with market friction, but rather something far less capitalist: government imposed price ceilings. Both companies experienced cost inflation, just like every other company in the US during those years, but neither was allowed to charge more than their Nickel Fare. The companies did what every other company does when they see their margins erode due to price caps: they stopped investing, stopped maintaining, and stopped caring about what their customers thought about it. They couldn't compete with each other on the value of their service, so they accepted their market share and declined together. Once people got fed up with crappy providers for subway service, they decided to go the public option with their own government funded line to bring some competition...which is how the IND line actually came into existence. Unsurprisingly, they also couldn't compete on a Nickel Fare, and all of the companies were forced into merger less than a decade later.

Unfortunately, in this quest to malign capitalism for the merger of three independent subway lines, the author forgets to mention the biggest benefit of that approach: Nobody paid a cent in taxes to build the second largest subway system in the world at the time.

The account of what's going on with the POS machines doesn't make economic sense. If it was true, it would be easy for one bank to capture most of the market simply by charging more reasonable POS fees. I think it's much more likely that it's the cardholder's bank that's overcharging, not the POS's.

I wish things like square and paypal solves this problem.

Speaking from direct experience, both Square and PayPal are terrible for accepting cards. I have a consulting client who wants to pay me with the company AmEx, I have yet to do a transaction that doesn't get flagged or held or otherwise interfered with. Horrible companies, with slow, uncaring, unresponsive customer service.

They don't solve the main issue - charging the small business the least amount of money possible.

If you're a business with sales that average $5, credit card fees are like 10% of your average purchase.

Yeah, so that there is no cheap option to process the card.

It will be solved by subscription billing.

Must be nice to check out 34 customers at a time though, right?

I kid.

Fragmentation is a huge issue in the retail industry. I've heard of companies that have different payroll staffers for different states, some that have different phones for different states because of fees, etc etc.

It also seems like there might be potential for a POS device that could 'spoof' other devices, to avoid fees and such. Surely it's just sending out certain headers to identify itself, right?

> It also seems like there might be potential for a POS device that could 'spoof' other devices, to avoid fees and such. Surely it's just sending out certain headers to identify itself, right?

Nope. PoS CC/DC terminals have quite sophisticated HSMs these days. Each device has a unique set of key pairs.

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