A big part of the reasons credit cards rose to such prominence is that the banking and payment rails are so incredibly stupidly designed. The check system and ACH which is the highest volume way that money is sent between people with different banks requires you to give out the secret key every time you make a payment. Plus it takes at least 1-2 days to clear which makes fraud more difficult to deal with.
Interestingly the credit card system also suffers from the first part, your number is printed right there on your card. But they’ve managed to find and/or strong arm ways to reduce fraud on their network, and as a consumer I’m not liable for paying it which is a huge benefit.
The author really lost me at the end though, I don’t see how regulation magically solves everything and they didn’t explain it at all. There is already a ton of regulation in the payment industry. And this comically flimsy underlying system could easily be improved by existing regulators, how about starting with small steps and seeing how that goes? Instead of advocating for throwing out the entire payment system all at once under the very flimsy assumption that the government will do it better.
However, I still prefer to use a credit card, because of the chargeback — the legal protections with credit cards are still higher.
Edit: about “you’re paying the fees” — maybe, but most of the merchants don’t show different price or don’t charge extra for credit card payment. So why not use the IMHO better option if it costs me the same.
(strangely, in australia, card surcharges became normalised just before cash payments fell off a cliff. credit card transactions have also declined; it's visa/mc debit that have skyrocketed.)
This is basically the situation VPN service providers are in. Yes, in theory, any given provider could be beholden to the state. However, when a new VPN provider can spring up so easily (spin up some DigitalOcean instances, stand up a WordPress/Shopify e-commerce frontend), it's unlikely that any given new player in the space has been gotten to yet by the state (unless, of course, it's a new marque of an existing company, set up specifically to serve as a honeypot for switchers.)
The system that was designed to do bank to bank, without the card systems being involved failed horribly. It was late to market and the launch has horrible mismanaged and covered in unnecessary secrecy. MobilePay had already launched and crabbed a large share of the market, the secrecy was completely pointless and I believe it was partly to blame for the massive failure of the solution.
This is incorrect. MobilePay started out as a layer on top of Dankort (Danish debit card), but after gaining sufficient volume they made a deal with all Danish banks to enable direct bank-to-bank transfers (without using the Dankort infrastructure).
The only difference between Swipp and MobilePay is that Swipp started out only supporting bank-to-bank transfers (thus only supporting a few banks) while MobilePay started out using Dankort (thus supporting all banks). And, as soon as MobilePay had sufficient volume, all banks were interested in circumventing the Dankort network.
It's interesting that it uses card tracks to move the money, but the identification and recipient is not based on card numbers, so the card stays anynomous for the recipient.
Mastercard and visa have recently been very open to this kind of methods, and also issuing virtual one-time-use cards. These new use cases for their network are quite healthy to the payments ecosystem.
Heres to hoping that Apple Pay (and Android) will open up directly to banks or solutions such as Mobile Pay, which bridges to direct bank transfers for member banks and then utilise credit cards as a backup for unsupported banks.
Do you think that the credit card companies having too much power is a big problem in the Nordics?
Our politicians and banks probably don't see it this way, but having a local alternative can help keep MasterCard and VISA in check. If they become to expensive or unreasonable most people already have a competitor in their wallet, one for whom fees are strictly controlled.
I just don't think there's much room for competition when one party gently keeps another in a chokehold. Klarna depends on Visa, but not vice versa.
Even Amex has an even lower market share than in the rest of the world.
-Direct bank payments use your bank id. You can have bank id stored in the phone, but you can also use a personal keychain authenticator
-Klarna, Collector, etc use your social security number as the primary identification method
-Mobile payments like Swish and mobile pay use your mobile number, so it is linked to your phone
subscription, not your phone.
Of course you still need to have a bank account, but there are a lot of banks out there.
So no batterie, money ? No network, no money ? Phone stolen, no money ? Phone broken, no money ?
What if I don't want to have a spying hardware on me at all time ?
I don't think that is essentially a bad thing. Forcing a digital signature for every transaction makes criminal activity difficult. Modern AML works much better because there is always a digital fingerprint for every transaction.
But I think that these are two distinct issues? Some crypto -things could somewhere in the future solve the privacy issue... But no society wants that, because real privacy makes criminal activity and money laundering possible. But that has nothing to do with credit card duopoly?
But the matter here is card vs phone. Your card do spy on you, but it doesn't have your contact, a microphone, the history of where you have been, etc.
You can easily give your card away to a friend for the day. Your card doesn't need an update. It's not connected to internet all the time. It won't die if it falls, if it rains or of it's too hot. You can have a replacement easily as well.
It's also way more accessible. My grandma can use it. A blind man can. They all work the same way.
A phone is only a good card alternative when every thing goes right. But I value resilience in my paiement system.
Regardless, an acual card and a payment processing network would cost billions to deploy.
Anyway, I was just thinking out loud my idea. I hate interest and mandatory insurance alike.
So in one year i have to pay you 11k.
It is basically 10% interest.
The traditional problem with bank-to-bank transfers in a retail, or point-of-sale, setting has been speed. Cheque was about the fastest that could be mustered.
But with developments like UK Faster Payments (which is mentioned in your link) bank-to-bank transfers are getting faster, in some cases instant. And so usability at the point-of-sale is now on par with cards.
In Holland, iDEAL is used a lot for retail purchases. It's an instant bank-to-bank payment option that competes with the card networks.
The equivalent in Sweden is Swish. It too is moving into point-of-sale payments.
As for the US, I suspect that at some point Zelle will pivot into retail point-of-sale payments. At which point the card networks will have a big competitor.
All of this is good news if you are worried about the card oligopolies!
As a consumer, a credit or debit card gives me a lot of protection. I wouldn't give that up for anything (oh, and the cashback I get too).
You open the MobilePay app, and touch the NFC thing. The amount and payee is shown, and you swipe to confirm the payment. The retailer's POS gets a message.
In a small shop without a fancy POS system, they just print a paper QR code. You can scan that, but you need to type the amount yourself.
They also assume you are involved in the illegal activity and you have to interview at the bank. All this for what can amount to a 20-50 GBP payment, and even if it represents <1% of your transfer volume.
If bank payments are going to become prevalent in e-commerce, this type of primitive reaction to fraud will need to improve drastically.
Apple Pay/Google Pay already offers near-instantaneous, highly-secure transactions in most stores - and with good consumer protection. Contactless cards offer the same up to £45.
I can get cashback/miles/reward points too.
What does a bank to bank transfer offer me as a consumer?
The difference between the Nordic countries and elsewhere may be that 10 years ago, these contactless payment methods weren't widespread.
If you have a basic consumer dispute about something (such as a retailer not giving a repair/refund for a faulty item), you should be able to file a chargeback with the card issuer and get a refund.
In the UK, a credit card is much better though, as for any purchase over £100, the card issuer is joinly liable with the retailer for any issues.
In the US, most PIN debit card transfers occur via either MasterCard's Maestro or Visa's Interlink debit networks. Signature debit payments go through MasterCard/Visa's credit card networks. So you've still got the duopoly problem.
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 to grow so large while managing to keep such a conspicuously low profile.
edit: and to answer my own question, the wikipedia page is quite informative : https://en.wikipedia.org/wiki/Visa_Inc.
Mastercard so much so that the recently removed their name from their logo as its nolonger needed.
One fintech startup recently sold for $5 billion to VISA. They issused a PR statement that was completely false, but if you didn't work in payments you'd never know they didn't have 11,000+ clients (hint: that's the number of institutions in NACHA.)
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 that fee goes back to the "card issuing" bank, so they like the system.
The merchant passes on the cost (generally) to the consumer, so they don't really notice, and the ease of moving the money in 99% of cases means everyone is happy.
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.
Venmo is the thing in the US, but China has Alipay/Wepay, SE asia has various digital payment apps, Japan has had a huge "cashless" push in the past 12 months....
If I were running a retail shop in the US I definitely would accept payment by Venmo if I could.
It's hard to say whether these apps are actually focused on B2C transactions, so far it's almost entirely C2C (P2P).
For instance, in China WeChat Pay only charges 0.1% above 10,000 RMB (from what various articles say). Square is not even in the same category, charging 2.6% + 10¢. And you don't need to buy any equipment to use WeChat Pay; you just need to pull up a QR code on your phone.
This allows people to on-board to WeChat Pay easily through online banking. They also have way less KYC hurdles, so people can go from signing up to sending money in minutes.
US online banking is eons behind China, and almost any other country. So many online banking systems in the US are prone to unauthorized access, which makes on-boarding and security highly inefficient.
The big difference is how fast and cheap these standardized bank-to-bank transactions are; with USA lagging behind in this area somewhat. In USA a wire transfer is more expensive than a credit card payment, in China, EU, Russia, etc it's cheaper than a credit card payment.
And modern Tendermint/Cosmos SDK-based chains or Solana are basically distributed databases, using consensus models similar to Raft, except with byzantine fault tolerance and Proof of Stake for leader selection.
No mining, no forks, finality within seconds, large throughput. Pretty boring, actually, with little hype surrounding it - it just works, like a regular database, except there's no single entity controlling it.
One of the top five payment gateways in Korea - CHAI - uses the decentralized Terra blockchain as their backend.
When talking to big merchants about any new payment product, the first question you will hear is often "so, how does this lower my interchange cost?"
Of course there are other frauds you are vulnerable to. Which is why it isn't clear what is really best
Merchants take credit cards to avoid losing a purchase. Cards have such a high volume that consumers expect it and some small portion will skip a purchase if its not an option. But merchants would much prefer you pay with a store card, debit card or one of many other payment methods that dont have the same (2-3%) cost that credit cards do.
So far it's been a really long-haul play where Apple has spent a lot of time establishing deals with banks manually, in order to get a tiny fee, which they can due to the increased security of their system. This hard work is necessary in order to create a payment network that can work for everyone.
Eventually, Apple will be in a position to launch their own network, while increasing fees for themselves and lowering fees for merchants.
As someone who's been a merchant I'm very happy to see this happening, although it's like watching a tree grow (paint drying would be exciting in comparison). It's likely Google will follow suit, and depending on Apple's choice of implementation, we could hope that it will be backed by a stable cryptocurrency - but that's just a shot in the dark.
Sure, it could happen somewhere down the line but saying that blockchain is "destroying the moat" today is a big stretch. Blockchain barely just started to realize that the moat is actually much larger than previously thought. And that parts of the moat exist for a reason. It's barely starting to understand the moat, still far from attacking it, let alone destroying it.
Hopefully it will but I'm not holding my breath nor my bitcoins.
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.
I'm not talking about payment processors so much as the degree to which people feel "either" when they could feel "both."
Divisiveness is quite rampant, and I think the language we use (or don't use) has an effect.
ie "Forget Google" -> why not both?
Note that this was a policy decision based on whim and a politician lobbying. No hearing, no evidence, no recourse, no rights and no meaningful alternative. Also a decision not taken by the banks nor, I believe, were they consulted.
The upopular person's (Wikileaks here) rights are your rights and my rights. If you think the've done the wrong thing, you're entitled to that opion and establishing that is literally what courts are for. Much the same way we might want law and courts involved for suspension of a driving license and not simply because a politician doesn't like you and lobbies a bit. "Nobody who drives for UPS can drive on the roads because they love Putin" --not as ridiculous a fabricated politician's quote as it should be.
But going back to it being a data network and standards organisation that describes the classic long-run decreasing average total cost curve of the natural monopoly which makes privatising it for profit a pure "rent-seeking" play.
So we can see how egregious the monopoly is two ways there. Practically with an example and according to classic and relatively uncontroversial micoreconomic theory.
So what about the classic monopolists' defence, which will come up again here. Define the market to be bigger and claim it's a small fraction of that bigger market. Can we just dismiss that as total B.S.? ie "You can also use cash to buy things." Try running a business or calculate the additional cost of buying the things you need without using the visa/mastercard network.
Unless you have multiple networks with very low switching costs it's a disaster. Disclosure: Ajit Pai disagrees with all that totally.
When it comes to advertising online though, you have only 2 choices...Google or Facebook. As a business I can't not go with those two or I'll lose immense business. I can go with a Visa, Mastercard, Discover, Amex...and it really has no effect on me outside of the benefits the card gives me. The fees charged to the banks, etc are essentially the same. So it's really no comparison as to which is worse for the market itself.
Of course it’s endlessly more complicated then that but it’s important to make the distinction.
When customer clicks “Checkout”, they are sent to payment processor website to enter card number like 1234 ...5678... and whichever card it is, it goes through, and shop owner receive the payment later.
Which means payment processor has contracts and connects with every card networks, absorb API differences, and on top of that, obeys and agrees to everything CC network thinks or says, to be able to handle any cards customers may have with them.
So if a Visa or MasterCard exec thinks maybe he don’t like Cheetos and make a call to processor CEOs how they think about it, no later than by Friday no one will be able to order a single bag of Cheetos, especially online, using any credit card because payment processors will have explicitly communicated that Cheetos had never been tolerated from the beginning and any store who let that happen will have accounts frozen.
It happens somewhat softer than that but kind of happening once couple years these days.
Someone is going to say:
Micropayments (it's never worked.)
Pre-auth'd lower amounts retailers can pull from you (might work.)
Crypto-escrow (Any place that used to do it has gone out of business I beleive.)
Too volatile: (Peer to Peer stable coins, or "trusted" stable coins protected by laws instead of code address this.)
Thus, peer to peer open source value transfer is the minimum amount of middlemen possible, but is crippled by regulatory overhead at the end points, giving the incumbents entrenched advantage. Caveat: I founded a cryptocurrency.
No more denying legal pornography businesses, no more denying legal fireworks stores, etc.
Even worse, the payment processors do not apply their own ToS unilaterally. You'll find some websites will retain processing, while you lose it, even though the reason is that your business model is high risk. PayPal is notorious for this. Their ToS will only be enforced in certain countries, leaving companies in places like China with PayPal processing while your company is permanently banned from the platform.
It becomes impossible to compete if you are banned from Stripe & PayPal while your competitors are not. If their own rules are not applied equally across your industry, they effectively pick the winners. Their platform also favors long-standing merchants in many ways.
First by providing them an account manager, second by essentially grandfathering in certain accounts. You'll find it very difficult to process payments in certain industries on PayPal, likely not even being successful in on-boarding, while sites operating in the exact same business have functioning PayPal accounts.
It's incredibly anti-competitive. These processors run such a large scale monopoly; there are so few comparable alternatives, I've seen so many people go out of business purely by losing their PayPal.
Note that it's value, and not number of transactions.
Personally, I have only 4 things pay out of my checking account.
Mortgage, HOA dues, and power are all bills that require checking account transactions for auto-payment to avoid credit card fees. These are very large transactions which will greatly skew any measurement by value.
The final thing paid out of my checking account is interesting: the credit card payment. Since any money I spend with my card necessarily is repaid from my checking account, that also greatly skews measurement by value.
If I spent 50% on housing, and spent all of the rest of my money on things with my credit card, then my personal ACH value percentage would be 66%. (1 unit house payment, 1 unit credit card transactions, 1 unit paying credit card bill)
This isn't even starting with business to business transactions. I'm unsure if the source is counting it in that metric, but it would further skew any value measurement. No factory is going to use credit card when buying $100,000 worth of parts from a supplier.
All those things considered, 82% seems about right, even if you assume something like 90% of consumer transactions use credit card.
I have a business who uses a credit card every month to buy more than $100,000 worth of materials from a supplier.
On the consumption end the card programs are wonderful, great purchase protection negotiated, delay on actual payment for additional working capital, and rewards. We basically never have to use cash for employee travel expenses, all via points.
There is no benefit for me paying my suppliers via ACH, wire, or check.
I think the largest chunk of the volume difference is commercial-use. I don't have the numbers handy but the difference is huge.
It really depends on the types of products and what the consumer experience is like. Google is an interesting beast in that we provide services across a wide variety of billing models.
You have immediate product purchases, where knowing that the transactions is complete immediately can be important (ex: Play store games, or movies). Credit cards are great for that instant guarantee.
For delayed billing or threshold billing (Ads), slower payment methods can work great (eg: ACH, wires, vouchers). Some of these also allow a standing instruction that a company that just keep paying money against to top-up their account (and Google will see it as a bank statement push payment).
So yes, Credit Cards are a small volume of US payments, they enable specific products that don't work great with ACH or wires. If the US ever gets 100% ubiquitous instant bank push payments, maybe that'll change, but our banking system is too disjoint to move at any kind of speed to do this.
The clearing house is also owned by many of the large banks in the US. While this seems nice, I'm sure there's some paranoia from non owners about joining a network owned by their competition.
The UK went and interesting path of forcing all banks to implement faster payments, so it got wide coverage.
Private companies can refuse cash.
"There is, however, no Federal statute mandating that a private business, a person, or an organization must accept currency or coins as payment for goods or services"
However, if you stole the thing and were ordered by the court to pay restitution, they would have to accept cash for that.
What's worse, if you look at the details, there is a swath of products that are darn near impossible to buy without a credit card.
* receive direct deposits
* pay credit card bills
* pay rent
Which represent a large amount of the value transferred vs number of transactions.
"100 billion transactions during 2014 with a total volume of US$6.8 trillion"
Sidenote: A bunch of the payment gateways began integrating BHIM and charging merchants a cut of the sale for what they pay 0 for. Can't see that lasting if people move off V/M completely.
- Isn't tied to a piece of plastic that expires
- Front loads the fraud prevention by requiring 2FA to make sure up front that the buyer actually wants to pay for this.
- Opt-in, per-transaction chargeback/escrow service (intended for shipment of physical goods) that you don't pay for if you don't activate. Transactions are clearly marked whether they include this during checkout. Otherwise transactions are final
- For subscriptions, allows you to specify the conditions under which future charges should also be accepted, and when they should be held and you get contacted to approve them instead.
- Basically anywhere the current system can fail/reverse a charge, the improved system would verify this up ahead, so the payment processor can be sure the buyer really wants to pay, and the merchant can be sure charges don't fail unless the buyer runs out of money in their account or actively cancels the subscription.
- Charge a much more reasonable processing fee, due to not needing to wade into disputes and fraud recovery all the time.
Why is it that to pay for something you give the seller the keys to your account and they go in and withdraw the money they want instead of the seller sending you a request and you accepting to send the requested money..
Another plus side of your suggestion is it now becomes trivial to cancel any subscriptions since you can simply stop allowing the payment to go through rather than getting the seller to stop taking your money.
This may sound like a slightly obsolete but otherwise well thought out system until you notice that revoking the SEPA mandate requires you to contact the vendor first which is kind of silly.
There is! Nothing forces vendors to collect a paper form and signature. I know some countries still love paper trails (hello Germany) but even there, you'll find some businesses that don't do it. When I lived in Berlin and signed up for my broadband with 1&1, I just had to copy/paste my IBAN into their online form.
> physically mail you a SEPA mandate which you have to sign and mail to your bank.
Nope. The bank is not involved at this stage. Banks authorize direct debits by default, they don't need to know about the mandate beforehand.
> revoking the SEPA mandate requires you to contact the vendor first which is kind of silly.
It's not. It leaves the responsibility with the contracting parties, and keep banks as a neutral medium. That said, as a customer, you can revert a direct debit with a single click, and permanently reject further direct debits. It doesn't have any effect on your contract (and the vendor will send it to debt collection if it believes you're in the wrong), but you keep full control.
By the way, you can build a fully digitized billing system on top of that (there's SEPAmail in France for instance), and more and more banks support instant payments, which I assume can be used to improve the scheme.
It’s an extension of the technology that powers Apple Pay and Google Pay, and basically allows merchants to get a virtual card issued to them.
In the EU that would require 2FA to happen, along with describing to the customer what the billing schedule is (required for SCA but being implemented slowly).
The end result is the merchant gets a non-expiring virtual card to bill the customer, and the customer get the ability to disable certain merchants by asking their bank to destroy the card linked to a specific merchant.
Unfortunately all of this stuff is very new, and there are a bunch of issues that will prevent merchants from using the tech. But it is happening slowly.
At this point, the innovation stream has just about dried up. We're left with a need for micropayments that don't cost more to process than the value of the transaction, and almost all innovation has taken place to one side of card services.
If we fixed international funds transfer we'd probably get some incremental benefit. KYC is only part of the problem here, I recently did some IBAN transactions to the UK government from Australia and the expectations of fixed-field width (send this 15+ char reference string, but the input side has 12 chars for the reference field) were bizarre.
Huge amount of excess profit in TT.
Cheques? dead except for the USA.
Coins are dying of covid.
Remittence processes and the Islamic banking tradition is waiting to be somewhat unlocked. (trust is not transitive, unless you are a migrant worker from S.E.Asia and you have to get money back to mom and dad efficiently, without having any formal ID in the host country because your boss took your passport)
I disagree completely.
There's no technical or business reason why we couldn't have micropayments tomorrow. It's been tried many times already. The thing about micropayments is nobody actually wants them. Each time you make a payment of any magnitude, your brain has to process a 'purchase' which carries a large mental burden, and eventually you get decision fatigue.
Micropayments are one of those ideas that people think we want, but in practice, nobody does.
As a thought exercise, why do you pay Netflix $13/month and deal with sporadic content disappearances, when you could pay Apple $1.99 for a perpetual license to whatever piece of content you could ever want? Nobody wants to make that purchasing decision each and every time they want something. They'd rather pay for an all you can eat buffet even if it's objectively worse and more expensive over time.
> If we fixed international funds transfer we'd probably get some incremental benefit.
Check out TransferWise! They've done a ton to solve this problem. They even have a currency agnostic bank account with local banking details in 6+ regions and supports 50+ currencies.  IMO they've largely solved remittences for the average joe.
If you've got a ton of money to move you can use InteractiveBrokers to exchange currencies at market rates for $20 per million (!!) in commission.
> And it could potentially have been even worse. Had their few competitors also gone down, literally all electronic payments would have broken at once.
This... is not true. As noted by another comment here, a vast majority of the value transferred (82%) is ACH in the US.
Big companies, a rent-like business, no pressure to do things well, own lots of very sensitive personal data, clients giving the data away without realizing it, little regulatory oversight on the data front, etc.
I would expect them to sell or leak poorly anonymised personal data, leading to huge privacy issues.
Why hasn't this happened?
But they are at their core public companies that want to maintain their image. They are reactive to public pressure and political headwinds, and will cover their bases by running away from thorny messy situations. This crosses the aisle in every imaginable way - whether its stifling whistleblowers or stifling supposed hate speech. The reaction to public pressure is not going to be avoidable with any conceivable system, privately owned or otherwise.
The best defense is competition, and despite this post's assertions, there is competition in this space.
Perhaps in the US, but elsewhere around the world Amex is barely ever accepted.
That said this duopoly only really applies to internationally accepted credit cards, lots of countries have alternative payment methods, but these generally don't reach beyond the borders.
Amex takes much more (~4%?), so the problem is even worse there. Of course, they can and do bribe the customer with part of that fee so that it seems attractive, but from the wider perspective it's a huge overhead for no good reason, and if every transaction was like this (i.e. if Visa-MC was replaced by Amex) then that would be a big drain on the economy.
Anything this duopoly can't control is a big no-no to them which is why they detest Bitcoin and the other alternative cryptocurrencies. Some online services are beginning to accept cryptocurrencies, which is a start. Cryptocurrency ATMs are a thing to cash out money, thus one could say that you might have bypassed them.
A side note, for those offended by master/slave terminology perhaps now you can ask Mastercard to change their name. Since, its pretty much has somehow offended somebody out there. /s
Bank transfers within a country are often free of charge, but are quite uncomfortable to make (typing numbers) and usually are not sent immediately (so that you can not pay this way in a grocery store).
Banks have no interest in making bank transfers easier or faster, or opening up to cheaper competitors of Visa/MasterCard. Meanwhile, people happily keep their money in a bank, seeing that all bank services are free and that it "can not get any better".
I think, if anyone is to replace Visa/MasterCard, they should also make their own bank (a place where people keep money in a long-term).
Some payment terminals now can also generate a QR code that you can use to pay, in addition to the normal debit/credit card payments.
> Fry: $30? I can't afford that. Unless... Do you take Visa?
> Salesman: Visa hasn't existed for 500 years.
> Fry: American Express?
> Salesman: 600 years.
> Fry: Discover card?
> Salesman: Sorry we don't take Discover.
the good news is that Amex seems to have stepped up while partnering with Walmart for their BlueBird cards - while not perfect, at least helping to add more options. and with walmart in the mix it seems to help get a 3rd (Amex) option accepted more places.
maybe not the perfect solution, but at least a step in the right direction.
Getting this "duopoly" right is very hard. Payments has a number of actors, and the label is there to ensure fair play between acquirer and card issuer.
While mastercard and visa controls the market, it's not like there isn't competition: Amex, discovery, etc., are all labels that compete with the so-called duopoly.
Is this a result from the community or the algorithm?
HN seems to have changed a lot in the last few years.
So, why? The article doesn't seem to answer that question. What prevents shops from supporting alternative payment systems?
Anyone familiar with the intricacies of these operations know how amenable they are to being debundled into discrete components and provided via an Ethereum-like protocol?
This is addressed in the article but the title doesn't reflect this accurately.
TLDR; Clickbait title :sad face:
Why? Because monopolies are bad, and we don't like them, no matter if they provide value to people, if they are not built around government regulations that stop competition from happening.
Those protocols are substantially more open than Visa/MasterCard, and introducing a competition shouldn't require hardware changes for the POS.
I have pretty much stopped using cash altogether and use cards mainly in those outlets which don't have upi.
It's bad idea to forget "issue 1" and focusing on "issue 2".
Both issues are major.
No, thank you.
In the EU the just use bank cards. And since there's regulations the fees are lows and everyone can use it everywhere.
If everything has to be accepted everywhere, then there's no differentiation
No commentary on the larger picture here or Amex/Discover, just pointing out your other examples don't exactly fit your point fully.
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".
Maybe we are better off with VISA.
How about NO! How about we go after all three of them? Google should not be left off the hook. This is just whataboutism by Google's PR.
Anyway, Google's employees are all over this thread.