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Home Depot Files Antitrust Lawsuit Against Visa, MasterCard

341 points by ikeboy 10y ago

coryfklein 10y ago
Digital currencies enable me to send $10 across the globe for less than a penny and Visa charges $0.30 - I have a hard time imagining a future where the system allows for such a large inefficient gap to remain for long. Not saying that current digital currencies (bitcoin, etc) will replace Visa. Just that they show that this problem doesn't cost 3% of the transaction to solve.
- kalleboo 10y ago
  > Digital currencies enable me to send $10 across the globe for less than a penny Yeah PayPal is pretty nice
- rhino369 10y ago
  Convert back and forth to money you can actually use is much more expensive though right?
  - coryfklein 10y ago
    If banks were to adopt some currency system that utilizes a blockchain-like technology, then I expect the currency would be accepted as cash more ubiquitously, but at that point it's all speculation.
pigpaws 10y ago
article NOT behind a paywall: http://boston.cbslocal.com/2016/06/15/home-depot-visa-mastercard-chip-cards-lawsuit/ http://boston.cbslocal.com/2016/06/15/home-depot-visa-master... TL;DR: chipped cards are not as secure as swiped cards. Also, CC processing is expensive.
- adrr 10y ago
  Not swiped cards. Chip and signature isn't as secure a chip and PIN.
ikeboy 10y ago
https://archive.is/wmqqR https://archive.is/wmqqR has it without paywall
chinathrow 10y ago
The whole field is so ripe for disruption yer nothing ever materialises....
- Afforess 10y ago
  Network effects. Same reason Facebook/LinkedIn/Twitter can suck, and yet not be displaced by technologically superior products.
  - nix0n 10y ago
    Is there a technologically superior version of Facebook?
    - jjawssd 10y ago
      People made a lot of noise about https://joindiaspora.com/ https://joindiaspora.com/ but in reality almost nobody cares about decentralized social media yet
      - nix0n 10y ago
        I did try Diaspora, but the UI seemed awkward and buggy, and it was slow despite me being the only person on it (maybe Heroku would have been better than a generic VPS).
deleted 10y ago
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post_break 10y ago
After Home Depot showed it didn't understand security and my credit card was spoofed I've tried to stop shopping there. It's difficult sometimes.
- tssva 10y ago
  It's difficult to shop at the Home Depot by me. Either none or 1 register with an actual cashier and 4 self-checkouts of which usually only 2 are functional at any given moment. On a weekend I have abandoned my items and left more than once because of the length of the checkout lines. Fortunately a Lowes is opening close by soon. They actually have cashiers at the registers.
logicallee 10y ago
if they had a trust, credit card processing fees would be 7%, not 3%. they obviously don't. - correction: "If you're looking for quick numbers, here you go: the average credit card processing cost for a retail business where cards are swiped is roughly 1.95% - 2%" source: https://www.cardfellow.com/average-fees-for-credit-card-processing/ https://www.cardfellow.com/average-fees-for-credit-card-proc... why would a trust have rates that low? It seems competitive to me...
- jellicle 10y ago
  The fees for credit card transactions are roughly four times as high as fees for debit card transactions.
  - CardFellow 10y ago
    That's not necessarily true. The debit network fees have gone up a lot. In some cases, they get pretty close to credit card transaction costs.
- function_seven 10y ago
  What makes you think 3% is low? Why isn't it high? Seems like a huge chunk of a transaction's cost to me. To clarify, supposed we lived in bizarroland where the transation fee was 7%. bizarrologicallee could post this very same comment, but as "if they had a trust, credit card processing fees would be 15%, not 7%"
  - developer2 10y ago
    Percentage fees make absolutely no sense, and that is the end of the discussion. A flat fee regardless of the transaction amount is the only method that even registers as logical.
    - germanier 10y ago
      Some part of the fee is used to insure against fraud. That is obviously related to transaction volume.
elthran 10y ago
Are there any Americans here who are able to explain why the US is so backwards when compared to European countries? Visa and Mastercard and the banks all offer Chip and Pin services here in the UK, and have done for years. I can understand the delay in adopting chip cards, with the ridiculously large number of terminals and cards that would have to be replaced - but I really don't see why when you're performing the migration to cards with a chip, you wouldn't implement PIN at the same time
- mikeash 10y ago
  Credit cards compete with other forms of payment, like cash. Making credit cards harder to use makes people shift payments to other forms. Implementing PINs is about balancing the costs of fraud against the costs of shifting those payments. If you cut fraud by X but you lose out on Y > X revenue due to reduced credit card use, it's a net loss. Card companies here apparently think that Y is indeed greater than X.
  - hx87 10y ago
    Honestly though I'd rather enter a PIN than use a dull piece of plastic to make an unreadable signature on a feedbackless screen. I punch keys all day but rarely write by hand.
    - mikeash 10y ago
      I think you're unusual. Many people struggle with PINs, or at least think they would, which in terms of hurting credit card use amounts to the same thing. Another issue is that PIN adoption often implies a liability shift. Right now I have zero liability for fraudulent uses of my credit card. Some places place liability on the cardholder if the cardholder didn't take sufficient care to protect their PIN and a fraudulent transaction is made with the PIN. If that happened, I would stop using credit cards unless it was absolutely necessary, and the mere possibility is enough to make me extremely skeptical of any move to require PINs. By the way, there is no requirement for your signature to be readable or reproducible or even anything resembling your name. Just do a quick freehand scribble. There's no reason for it to be harder than entering a PIN.
teilo 10y ago
The good news is that upgrading all these terminals to chip will make chip-and-pin a simple matter of a software update. I don't know if it was a matter of profit so much as fear of customer alienation. First they get customers used to using the chips. Then they can make them use pins later. The biggest hurdle will be past once all the chip terminals actually work. It's crazy how many vendors were forced to install these things before the processors were even able to process chip transactions. Most small vendors in this area of the country still are not able to accept chip cards despite having the newer hardware. Thus they are now liable for fraudulent transactions on swiped cards because their processors cannot get their sh*t together. But once that debacle is resolved, chip and pin should follow as a matter of course. Frankly, I too wish they had just ripped the bandaid off. After having spent a couple weeks in europe, it is idiotic how many restaurants in non-tourist towns have to scramble to find the one terminal that can print a signature slip for their American guests.
kylecordes 10y ago
It seems to me that these alternatives (Chip & sign, chip and pin, carrying a credit card at all) all compete poorly with the "tap my phone to pay" offerings. I use the latter whenever and wherever it is offered. As I understand it offers greater security than any of the above, and more importantly (life is short) it is much faster. (Though there is one wrinkle. Most point-of-sale systems process phone payments with just the tap. A few of them seem to instead treat it as equivalent to a swipe, and then launch you into a legacy multistep handshake thereafter.) For reasons I don't understand, the credit card makers have spent many years bringing the new chip cards to market, they include much higher technology than ever offered before, yet the payment process takes much longer. Of course these few seconds don't matter that much per transaction, but think it might be enough to actually make a meaningful difference in staffing levels and line lengths at big stores in December. I do understand the fees though. The credit card brands and banks have worked themselves, through years of diligent effort, into a business where they can impose a kind of "tax" of 3% on most of the retail economy across the entire US. This is obviously of immense economic value to them, and they will work very hard at every level to maintain it for as long as possible. On the other hand, paying these companies a 3% tax on every retail transaction is... rather surprising in the grand scheme of things, and seems unlikely to persist for that much longer.
- dec0dedab0de 10y ago
  It seems to me that these alternatives (Chip & sign, chip and pin, carrying a credit card at all) all compete poorly with the "tap my phone to pay" offerings. Cards are waterproof, and don't require being charged.
  - nacs 10y ago
    How is this an issue? Most people don't have issues keeping their phone's out of water or keeping it charged.
    - BinaryIdiot 10y ago
      Parent was referring to cards not phones.
uptown 10y ago
I tried to pay with ApplePay at The Home Depot but their readers wouldn't allow it. If your company is seriously concerned about fraud, maybe allow customers to use available systems that help prevent it.
- kijeda 10y ago
  Worse, they used to support it. They disabled it with the line that "upgrades" to their terminals were the cause. https://consumerist.com/2015/05/05/apple-pay-unavailable-at-home-depot-as-retailer-upgrades-payment-terminals/ https://consumerist.com/2015/05/05/apple-pay-unavailable-at-...
cmurf 10y ago
What happened to RFID/contactless? All of my cards had RFID, and then when they were replaced got chipped. No RFID. I called all of the issuers and they said chip only, no RFID option available. It's almost like they want us to use our phones instead of the card itself? And why are chip transactions so much slower than either swipe or contactless transactions? It really is something of a regression.
- kuzmin 10y ago
  Your RFID card is very easy to attack. Recently I heard of an attack where a guy was sneakily putting a RFID card reader against people's pockets on the subway. With this he was able to charge each card $20 without them even having to authorize the transaction. (above $20 usually requires some auth) Phones authorize the transaction differently and are this still safe to use for tap & pay.
  - germanier 10y ago
    The problem with that kind of attack is that it's easily traceable and easy to spot. That guy needed a merchant account to carry it out. To get that someone had to show their identity to the processor. Also, once it's discovered you can easily find out who else was affected. It also takes some time to get that money out of the merchant account. I've yet to hear someone actually doing that in practice because it only sounds if you don't think too long about it.
  - bryanlarsen 10y ago
    Got any sources? That's a very common urban myth, there have even been some pictures that have gone viral on Twitter. As far as I can tell, every such story that's been actually tracked to the source has fallen apart.
  - gruez 10y ago
    This attack doesn't work because as soon as you're discovered by a few victims, the payment processor is going to roll back all your transactions. Not to mention the massive paper trail you leave behind when you are applying for a merchant account.
dean 10y ago
In Canada, Walmart is suing Visa for 'unacceptably high' fees. http://www.cbc.ca/news/business/walmart-canada-visa-1.3630956 http://www.cbc.ca/news/business/walmart-canada-visa-1.363095...
- ikeboy 10y ago
  They stopped accepting it in Canada, and are suing in the US if I'm reading that right.
iamleppert 10y ago
At this point, what is stopping some other company from coming in and giving all the merchants a square-like payment terminal that doesn't use the credit card networks? I honestly think this is something that needs to be done as a public works project, or a non-profit.
- unabst 10y ago
  If you have an idea, the chances someone is already doing it are actually quite high: https://www.withkash.com/ https://www.withkash.com/
  - aroch 10y ago
    While a service that doesn't allow chargebacks is very, very merchant friendly, it is super not consumer friendly. Chargebacks are frequently last resorts for dealing with unscrupulous businesses or places that just don't give a shit once they've sold you what they want to sell you. That said, chargebacks can also be used vindictively and/or fraudulently. And Visa/MC/etc could do a better job in dispute handling.
    - unabst 10y ago
      The police and the law should protect consumers from fraud. One major root of the problem is the liability shift from police to the cards and banks. If you're a buyer, you're suppose to file a chargeback, not call the police. If you're the merchant, you're suppose to contest the chargeback, not call the police. In a real sense, it's legalized theft enabled by a card ecosystem sustained by companies with a monopoly that make too much. To think the law favors these companies more than the people is outright disgusting.
      - ikeboy 10y ago
        For smaller purchases it's not worth it to go to the police or initiate a lawsuit, so people won't. But if they have no recourse they wouldn't buy at all, so payment processors need to offer some easier method of recovery. If you as a merchant get an invalid chargeback, you can report the buyer to the police.
vermontdevil 10y ago
A typical process using a chip card: 1) Swipe card (out of habit) 2) Machine says use chip card reader. 3) Insert card in reader. 4) Machine freezes. 5) Get support - reset machine quickly. 6) Plan to swipe but luckily remembered. Inserts in slot. 7) Wait for what feels like hours to get it going. 8) Enter code 9) Approved! Takes card out. Blah. I am sure in few years things will get better though. Or maybe just go with Apple Pay (or that type).
- djsumdog 10y ago
  In New Zealand, almost all terminals have had chip readers for years and I've never had any of those issues. In almost every case I just insert a card, type my pin and I'm good. The German systems are a bit slower than others (and also everyone there, young and old, uses cash more than cards, which is odd), but they essentially work the same way. America's credit and banking systems are over two decades behind the rest of the planet (including parts of India). In NZ, Australia, Germany and Indian, people can make person-to-person transfers to anyone, on any bank, within 24-hours, for free, using just their account number and full name (and in Germany a one time use TAN number, which other countries are trying to implement). This is all taken care of at the government banking level. No Square. No PayPal. No Facebook. Just state mandated person-to-person transfers.
  - kentosi 10y ago
    As an Australian who's recently moved to US I'm absolutely dumbfounded by this. I need a third-party app to transfer money to my friend (Venmo). Why don't the banks allow easy inter-bank transfer here? And with signing with my credit-card, I feel like I'm back in 2010 in Australia when some retails still hadn't adopted chip technology. Dear US, you're a great country, but please catch up.
    - vermontdevil 10y ago
      Can't blame you. It's the stupid system that refuses to improve and improvise. Us consumers are stuck.
- 10y ago
Adutude 10y ago
It would be nice if hacker news did not accept links to pay-walled sites
- kuschku 10y ago
  Use this link instead, it bypasses the paywall: http://www.wsj.com/article_email/home-depot-u-s-credit-card-firms-slow-to-upgrade-security-1466000734-lMyQjAxMTA2NzEyNzAxNDc5Wj http://www.wsj.com/article_email/home-depot-u-s-credit-card-...
  - uudecode 10y ago
    Where does the lMyQjAxMTA2NzEyNzAxNDc5Wj come from?
    - kuschku 10y ago
      That’s for you to find out – I saw a link like this once, too, and built an extension for myself after discovering how and why it works – have fun ;)
      - uudecode 10y ago
        Easier: Add /amp before /articles. (This has been posted on HN before.) In fact, "amphtml" is the first link on the page. Follow this link to see the full article. However the /amp URL does not retrieve comments like the URL you posted.
        kuschku 10y ago
        Mine is a very similar solution, but yes, this is another nice solution. Personally, I prefer the amp version on mobile, and this on desktop.
- roasm 10y ago
  You can also click on the "web" link at the top of this page just under the title of the article. That does a Google search for the article and that lets you in.
unabst 10y ago
tl;tr Fuck these cards. Go team Depot. Walmart is suing too. [0] As someone with one foot in retail, I can honestly say these cards are not doing anyone any favors. Fraud is rampant and there are shoppers that travel the world [0.5] with stolen cards just to spend stolen cards and gift cards [1]. During the transition to chip, Square had liability shift for non-chip cards [2], but we failed to meet the requirements for a few transactions because we insisted on entering the ZIP for security, which requires key entry even at an additional fee. There was no feature to enable ZIP code entry for swipes. In these cases, trying to heighten security with additional measures was the wrong move for us. We should have just let them swipe and Square eat the cost. Apple has been burying a scandal of its own with Apple Pay fraud. Once after a shopper left, we immediately received negative feedback through Square from someone claiming they didn't just buy anything from our store. Well, when someone has a phone, there is nothing to check. Though Apple Stores seem to have been hit hard, which seems appropriate [3]. The main problems are, 1) as retailers we cannot treat every customer as a crook nor can we profile them [4], 2) if they jump through all the hurdles, we can't then not sell them something even if something seems odd, and 3) in the case of Apple Pay, gift cards, and some swipe transactions, retailers are actually covered so even if buyers appear suspect, there is zero incentive to call them out, 4) the police don't treat it as shoplifting, and 5) some of the worst offenders are not suspicious at all, and can even be contesting their own purchases on purpose. This is just a fact, but most of the scammers that came through our store were from NY and were black (again, just a fact, not saying anything about race or NY, though something does seem to be going on there [4][5]). -- [0] http://www.wsj.com/articles/wal-mart-sues-visa-over-chip-enabled-debit-card-transactions-1462906677 http://www.wsj.com/articles/wal-mart-sues-visa-over-chip-ena... [0.5] http://arstechnica.com/tech-policy/2014/11/authorities-arrest-118-people-in-airline-ticket-fraud-sting/ http://arstechnica.com/tech-policy/2014/11/authorities-arres... [1] http://www.tripwire.com/state-of-security/risk-based-security-for-executives/risk-management/gift-card-fraud-how-its-committed-and-why-its-so-lucrative/ http://www.tripwire.com/state-of-security/risk-based-securit... [2] https://squareup.com/news/why-square-sellers-can-rest-easy-about-the-liability-shift https://squareup.com/news/why-square-sellers-can-rest-easy-a... [3] http://www.nytimes.com/2015/03/17/business/banks-find-fraud-abounds-in-apple-pay.html http://www.nytimes.com/2015/03/17/business/banks-find-fraud-... [4] http://www.ag.ny.gov/press-release/ag-schneiderman-announces-agreement-barneys-new-york-address-discrimination-against http://www.ag.ny.gov/press-release/ag-schneiderman-announces... [5] http://nypost.com/2016/04/26/rappers-used-stolen-credit-cards-to-cheat-department-stores/ http://nypost.com/2016/04/26/rappers-used-stolen-credit-card...
tosseraccount 10y ago
American Express sued Visa and Mastercard in 2004: http://www.nbcnews.com/id/6494456/ns/business-us_business/t/american-express-sues-visa-mastercard/ http://www.nbcnews.com/id/6494456/ns/business-us_business/t/... They settled in 2007 : http://www.nytimes.com/2008/06/26/business/26credit.html http://www.nytimes.com/2008/06/26/business/26credit.html Mastercard paid $1.8 billion, Visa paid $2.1 billion MA and V have way outperformed AXP since.
ccvannorman 10y ago
I wish that the shopping experience was 1) I go to a store and pick up what I need 2) I walk out of the store with everything and take it home 3) Store knows what I took (RFID tags) 4) Store knows who I am (Cameras, gait analysis, face, whatever, fingerprint at the door, phone swipe, credit card swipe, be creative) 5) I receive an e-bill when the vendor identifies me 6) I set up an auto-pay on my e-bill Honestly, tap-to-pay doesn't seem like any difference at all vs cash or credit to me. Show me something where I don't even need to interact on exiting the store!
- hinkley 10y ago
  The original pitch for the RFIDs was that they'd just be able to scan your whole cart. I'm not sure what happened in the interim.
  - seanp2k2 10y ago
    RFID didn't work reliably from more than a few inches away and with that many items? Tagging every item including bulk things like produce was a non-starter for merchants due to all the extra labor involved? RFID tags cost much more than the barcode already on product packaging? Check out hardware for this was massively expensive, didn't integrate with existing lane systems smoothly, confused consumers, was largely unavailable due to lack of demand, and was super buggy / unreliable? Those are all guesses but they all seem likely to me.
    - TillE 10y ago
      > from more than a few inches away Nah, you can always crank up the power in line with the inverse square law. Your other reasons are plausible. RFID tags are fairly cheap, but they can't compete with printing a barcode on a label.
  - ploxiln 10y ago
    I'm sure a few of the engineers knew that would never happen. But it's someone else's job to sell the tech to businesses, and the stock to wallstreet ...
crb002 10y ago
Every chip reader in Des Moines uses the same reader hardware, and every software install on them is radically different. Somebody is making bank writing the glitchy touch screen apps.
ArkyBeagle 10y ago
This seems similar to WalMart's recent decision to stop taking some credit cards in Canada. https://news.ycombinator.com/item?id=11887469 https://news.ycombinator.com/item?id=11887469
callmeed 10y ago
Where I am in California only about 1/3 of merchants are accepting chip cards (even though I believe the deadline was October of last year).
jdeibele 10y ago
I received a debit card from my relatively small credit union a few days ago. I was very surprised to see that it didn't have a chip in it. It seems likely that the fees they earn from "signature transactions" must be significant enough that they don't want anyone using it as a chip card. An alternative answer is that the cost of the cards themselves is so much that they don't want to do it. When I lost my wallet, a different credit union charged me $10 for a replacement card. And neither had a chip. The other banks did it for free.
- robbiet480 10y ago
  When this article mentions "signature transactions" it is speaking of "chip and sig(nature)", meaning that you must insert or "dip" the chip-enabled card into a terminal and then sign on the terminal. The signature is submitted to your bank along with the transaction for verification. "chip and PIN" is much the same, except that you must enter a PIN instead of signing, and the PIN is sent to your bank for verification. I would also add that signature verification doesn't really do much, since banks will accept just about anything as your authorized signature. A signature is also not required for transactions under $25 (usually, depends on the merchant and specific minimums that your issuing bank sets). It is quite weird that you don't have a chip card, since it is mandated to only provide chip enabled cards as of October 2016. I would ask your credit union for the reasoning behind not issuing you one.
frandroid 10y ago
This seems like part of the global retailer war against credit card companies, such as seen here in Canada: https://www.thestar.com/news/canada/2016/06/11/walmart-canada-will-no-longer-accept-visa-due-to-high-fees.html https://www.thestar.com/news/canada/2016/06/11/walmart-canad...
willhamina 10y ago
I've gone to cash whereever possible. I needn't monitor my CC accounts so closely, reconcile them at end-of-month nor worry about stolen cards. Sellers love cash. Best of all I spend far less - I am more parsimonious if I pay with cash.
rietta 10y ago
Site without a paywall - http://www.ajc.com/news/business/home-depot-visa-and-mastercard-are-colluding-on-ca/nrgMZ/ http://www.ajc.com/news/business/home-depot-visa-and-masterc...
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FollowSteph3 10y ago
I'm surprised the discussion isn't focused on the 3% fee, it's almost not discussed. Think about that, that's 3% of all retail transactions for electronic processing. And their not even liable for charge backs, that's paid by the vendor. Another thing to realize, most credit cards have some kind of reward program that amounts to about a 1% payout. That's coming out of the transaction fees, which if you do the math is actually being paid for by the merchant. If the fees were 2% there would no longer be rewards programs. I find that interesting. The retail world is being taxed to pay the credit xard reward programs of their customers. Makes you think a bit doesn't it ;)
optforfon 10y ago
It's interesting how in China they kinda leapfrogged credit cards all together (they still exist, but they're not ubiquitous). Here it's either cash or payments through phones and QR codes using Alipay/Wechat/etc. It's pretty fantastic and there is very little lock in like b/c these aren't hardware-centric technologies. Just download an app, connect it to a bank account and you're good to go (both merchant and customer). So competitors are free to disrupt all they want. Meanwhile parasites like Visa skim an insane 3% off of the whole US retail economy. How this isn't banned by the government is beyond me... I'm sure it rivals the sales tax in some jurisdictions.
pbreit 10y ago
Oh, dear, Home Depot, please, no. Chip & PIN is the worst user experience of all of them.
solutions16 10y ago
i strongly recommend consultanthackers@outlook.com for all your hacking problems, he helped me spy on my husband when he was cheating, spying on my husband's phone activities, facebook, emails, whatsapp, calls, skype and others. am sure someone somewhere out there is looking for how to solve their relationship problems, contact him and am sure he will help you too.

341 points by ikeboy 10y ago

Digital currencies enable me to send $10 across the globe for less than a penny and Visa charges $0.30 - I have a hard time imagining a future where the system allows for such a large inefficient gap to remain for long. Not saying that current digital currencies (bitcoin, etc) will replace Visa. Just that they show that this problem doesn't cost 3% of the transaction to solve.

kalleboo 10y ago
> Digital currencies enable me to send $10 across the globe for less than a penny Yeah PayPal is pretty nice
rhino369 10y ago
Convert back and forth to money you can actually use is much more expensive though right?
- coryfklein 10y ago
  If banks were to adopt some currency system that utilizes a blockchain-like technology, then I expect the currency would be accepted as cash more ubiquitously, but at that point it's all speculation.

pigpaws 10y ago

article NOT behind a paywall: http://boston.cbslocal.com/2016/06/15/home-depot-visa-mastercard-chip-cards-lawsuit/ http://boston.cbslocal.com/2016/06/15/home-depot-visa-master... TL;DR: chipped cards are not as secure as swiped cards. Also, CC processing is expensive.

adrr 10y ago
Not swiped cards. Chip and signature isn't as secure a chip and PIN.

ikeboy 10y ago

https://archive.is/wmqqR https://archive.is/wmqqR has it without paywall

chinathrow 10y ago

The whole field is so ripe for disruption yer nothing ever materialises....

Afforess 10y ago
Network effects. Same reason Facebook/LinkedIn/Twitter can suck, and yet not be displaced by technologically superior products.
- nix0n 10y ago
  Is there a technologically superior version of Facebook?
  - jjawssd 10y ago
    People made a lot of noise about https://joindiaspora.com/ https://joindiaspora.com/ but in reality almost nobody cares about decentralized social media yet
    - nix0n 10y ago
      I did try Diaspora, but the UI seemed awkward and buggy, and it was slow despite me being the only person on it (maybe Heroku would have been better than a generic VPS).

deleted 10y ago

[deleted]

post_break 10y ago

After Home Depot showed it didn't understand security and my credit card was spoofed I've tried to stop shopping there. It's difficult sometimes.

tssva 10y ago
It's difficult to shop at the Home Depot by me. Either none or 1 register with an actual cashier and 4 self-checkouts of which usually only 2 are functional at any given moment. On a weekend I have abandoned my items and left more than once because of the length of the checkout lines. Fortunately a Lowes is opening close by soon. They actually have cashiers at the registers.

logicallee 10y ago

if they had a trust, credit card processing fees would be 7%, not 3%. they obviously don't. - correction: "If you're looking for quick numbers, here you go: the average credit card processing cost for a retail business where cards are swiped is roughly 1.95% - 2%" source: https://www.cardfellow.com/average-fees-for-credit-card-processing/ https://www.cardfellow.com/average-fees-for-credit-card-proc... why would a trust have rates that low? It seems competitive to me...

jellicle 10y ago
The fees for credit card transactions are roughly four times as high as fees for debit card transactions.
- CardFellow 10y ago
  That's not necessarily true. The debit network fees have gone up a lot. In some cases, they get pretty close to credit card transaction costs.
function_seven 10y ago
What makes you think 3% is low? Why isn't it high? Seems like a huge chunk of a transaction's cost to me. To clarify, supposed we lived in bizarroland where the transation fee was 7%. bizarrologicallee could post this very same comment, but as "if they had a trust, credit card processing fees would be 15%, not 7%"
- developer2 10y ago
  Percentage fees make absolutely no sense, and that is the end of the discussion. A flat fee regardless of the transaction amount is the only method that even registers as logical.
  - germanier 10y ago
    Some part of the fee is used to insure against fraud. That is obviously related to transaction volume.

elthran 10y ago

Are there any Americans here who are able to explain why the US is so backwards when compared to European countries? Visa and Mastercard and the banks all offer Chip and Pin services here in the UK, and have done for years. I can understand the delay in adopting chip cards, with the ridiculously large number of terminals and cards that would have to be replaced - but I really don't see why when you're performing the migration to cards with a chip, you wouldn't implement PIN at the same time

mikeash 10y ago
Credit cards compete with other forms of payment, like cash. Making credit cards harder to use makes people shift payments to other forms. Implementing PINs is about balancing the costs of fraud against the costs of shifting those payments. If you cut fraud by X but you lose out on Y > X revenue due to reduced credit card use, it's a net loss. Card companies here apparently think that Y is indeed greater than X.
- hx87 10y ago
  Honestly though I'd rather enter a PIN than use a dull piece of plastic to make an unreadable signature on a feedbackless screen. I punch keys all day but rarely write by hand.
  - mikeash 10y ago
    I think you're unusual. Many people struggle with PINs, or at least think they would, which in terms of hurting credit card use amounts to the same thing. Another issue is that PIN adoption often implies a liability shift. Right now I have zero liability for fraudulent uses of my credit card. Some places place liability on the cardholder if the cardholder didn't take sufficient care to protect their PIN and a fraudulent transaction is made with the PIN. If that happened, I would stop using credit cards unless it was absolutely necessary, and the mere possibility is enough to make me extremely skeptical of any move to require PINs. By the way, there is no requirement for your signature to be readable or reproducible or even anything resembling your name. Just do a quick freehand scribble. There's no reason for it to be harder than entering a PIN.

teilo 10y ago

The good news is that upgrading all these terminals to chip will make chip-and-pin a simple matter of a software update. I don't know if it was a matter of profit so much as fear of customer alienation. First they get customers used to using the chips. Then they can make them use pins later. The biggest hurdle will be past once all the chip terminals actually work. It's crazy how many vendors were forced to install these things before the processors were even able to process chip transactions. Most small vendors in this area of the country still are not able to accept chip cards despite having the newer hardware. Thus they are now liable for fraudulent transactions on swiped cards because their processors cannot get their sh*t together. But once that debacle is resolved, chip and pin should follow as a matter of course. Frankly, I too wish they had just ripped the bandaid off. After having spent a couple weeks in europe, it is idiotic how many restaurants in non-tourist towns have to scramble to find the one terminal that can print a signature slip for their American guests.

kylecordes 10y ago

It seems to me that these alternatives (Chip & sign, chip and pin, carrying a credit card at all) all compete poorly with the "tap my phone to pay" offerings. I use the latter whenever and wherever it is offered. As I understand it offers greater security than any of the above, and more importantly (life is short) it is much faster. (Though there is one wrinkle. Most point-of-sale systems process phone payments with just the tap. A few of them seem to instead treat it as equivalent to a swipe, and then launch you into a legacy multistep handshake thereafter.) For reasons I don't understand, the credit card makers have spent many years bringing the new chip cards to market, they include much higher technology than ever offered before, yet the payment process takes much longer. Of course these few seconds don't matter that much per transaction, but think it might be enough to actually make a meaningful difference in staffing levels and line lengths at big stores in December. I do understand the fees though. The credit card brands and banks have worked themselves, through years of diligent effort, into a business where they can impose a kind of "tax" of 3% on most of the retail economy across the entire US. This is obviously of immense economic value to them, and they will work very hard at every level to maintain it for as long as possible. On the other hand, paying these companies a 3% tax on every retail transaction is... rather surprising in the grand scheme of things, and seems unlikely to persist for that much longer.

dec0dedab0de 10y ago
It seems to me that these alternatives (Chip & sign, chip and pin, carrying a credit card at all) all compete poorly with the "tap my phone to pay" offerings. Cards are waterproof, and don't require being charged.
- nacs 10y ago
  How is this an issue? Most people don't have issues keeping their phone's out of water or keeping it charged.
  - BinaryIdiot 10y ago
    Parent was referring to cards not phones.

uptown 10y ago

I tried to pay with ApplePay at The Home Depot but their readers wouldn't allow it. If your company is seriously concerned about fraud, maybe allow customers to use available systems that help prevent it.

kijeda 10y ago
Worse, they used to support it. They disabled it with the line that "upgrades" to their terminals were the cause. https://consumerist.com/2015/05/05/apple-pay-unavailable-at-home-depot-as-retailer-upgrades-payment-terminals/ https://consumerist.com/2015/05/05/apple-pay-unavailable-at-...

cmurf 10y ago

What happened to RFID/contactless? All of my cards had RFID, and then when they were replaced got chipped. No RFID. I called all of the issuers and they said chip only, no RFID option available. It's almost like they want us to use our phones instead of the card itself? And why are chip transactions so much slower than either swipe or contactless transactions? It really is something of a regression.

kuzmin 10y ago
Your RFID card is very easy to attack. Recently I heard of an attack where a guy was sneakily putting a RFID card reader against people's pockets on the subway. With this he was able to charge each card $20 without them even having to authorize the transaction. (above $20 usually requires some auth) Phones authorize the transaction differently and are this still safe to use for tap & pay.
- germanier 10y ago
  The problem with that kind of attack is that it's easily traceable and easy to spot. That guy needed a merchant account to carry it out. To get that someone had to show their identity to the processor. Also, once it's discovered you can easily find out who else was affected. It also takes some time to get that money out of the merchant account. I've yet to hear someone actually doing that in practice because it only sounds if you don't think too long about it.
- bryanlarsen 10y ago
  Got any sources? That's a very common urban myth, there have even been some pictures that have gone viral on Twitter. As far as I can tell, every such story that's been actually tracked to the source has fallen apart.
- gruez 10y ago
  This attack doesn't work because as soon as you're discovered by a few victims, the payment processor is going to roll back all your transactions. Not to mention the massive paper trail you leave behind when you are applying for a merchant account.

dean 10y ago

In Canada, Walmart is suing Visa for 'unacceptably high' fees. http://www.cbc.ca/news/business/walmart-canada-visa-1.3630956 http://www.cbc.ca/news/business/walmart-canada-visa-1.363095...

ikeboy 10y ago
They stopped accepting it in Canada, and are suing in the US if I'm reading that right.

iamleppert 10y ago

At this point, what is stopping some other company from coming in and giving all the merchants a square-like payment terminal that doesn't use the credit card networks? I honestly think this is something that needs to be done as a public works project, or a non-profit.

unabst 10y ago
If you have an idea, the chances someone is already doing it are actually quite high: https://www.withkash.com/ https://www.withkash.com/
- aroch 10y ago
  While a service that doesn't allow chargebacks is very, very merchant friendly, it is super not consumer friendly. Chargebacks are frequently last resorts for dealing with unscrupulous businesses or places that just don't give a shit once they've sold you what they want to sell you. That said, chargebacks can also be used vindictively and/or fraudulently. And Visa/MC/etc could do a better job in dispute handling.
  - unabst 10y ago
    The police and the law should protect consumers from fraud. One major root of the problem is the liability shift from police to the cards and banks. If you're a buyer, you're suppose to file a chargeback, not call the police. If you're the merchant, you're suppose to contest the chargeback, not call the police. In a real sense, it's legalized theft enabled by a card ecosystem sustained by companies with a monopoly that make too much. To think the law favors these companies more than the people is outright disgusting.
    - ikeboy 10y ago
      For smaller purchases it's not worth it to go to the police or initiate a lawsuit, so people won't. But if they have no recourse they wouldn't buy at all, so payment processors need to offer some easier method of recovery. If you as a merchant get an invalid chargeback, you can report the buyer to the police.

vermontdevil 10y ago

A typical process using a chip card: 1) Swipe card (out of habit) 2) Machine says use chip card reader. 3) Insert card in reader. 4) Machine freezes. 5) Get support - reset machine quickly. 6) Plan to swipe but luckily remembered. Inserts in slot. 7) Wait for what feels like hours to get it going. 8) Enter code 9) Approved! Takes card out. Blah. I am sure in few years things will get better though. Or maybe just go with Apple Pay (or that type).

djsumdog 10y ago
In New Zealand, almost all terminals have had chip readers for years and I've never had any of those issues. In almost every case I just insert a card, type my pin and I'm good. The German systems are a bit slower than others (and also everyone there, young and old, uses cash more than cards, which is odd), but they essentially work the same way. America's credit and banking systems are over two decades behind the rest of the planet (including parts of India). In NZ, Australia, Germany and Indian, people can make person-to-person transfers to anyone, on any bank, within 24-hours, for free, using just their account number and full name (and in Germany a one time use TAN number, which other countries are trying to implement). This is all taken care of at the government banking level. No Square. No PayPal. No Facebook. Just state mandated person-to-person transfers.
- kentosi 10y ago
  As an Australian who's recently moved to US I'm absolutely dumbfounded by this. I need a third-party app to transfer money to my friend (Venmo). Why don't the banks allow easy inter-bank transfer here? And with signing with my credit-card, I feel like I'm back in 2010 in Australia when some retails still hadn't adopted chip technology. Dear US, you're a great country, but please catch up.
  - vermontdevil 10y ago
    Can't blame you. It's the stupid system that refuses to improve and improvise. Us consumers are stuck.
10y ago

Adutude 10y ago

It would be nice if hacker news did not accept links to pay-walled sites

kuschku 10y ago
Use this link instead, it bypasses the paywall: http://www.wsj.com/article_email/home-depot-u-s-credit-card-firms-slow-to-upgrade-security-1466000734-lMyQjAxMTA2NzEyNzAxNDc5Wj http://www.wsj.com/article_email/home-depot-u-s-credit-card-...
- uudecode 10y ago
  Where does the lMyQjAxMTA2NzEyNzAxNDc5Wj come from?
  - kuschku 10y ago
    That’s for you to find out – I saw a link like this once, too, and built an extension for myself after discovering how and why it works – have fun ;)
    - uudecode 10y ago
      Easier: Add /amp before /articles. (This has been posted on HN before.) In fact, "amphtml" is the first link on the page. Follow this link to see the full article. However the /amp URL does not retrieve comments like the URL you posted.
      - kuschku 10y ago
        Mine is a very similar solution, but yes, this is another nice solution. Personally, I prefer the amp version on mobile, and this on desktop.
roasm 10y ago
You can also click on the "web" link at the top of this page just under the title of the article. That does a Google search for the article and that lets you in.

unabst 10y ago

tl;tr Fuck these cards. Go team Depot. Walmart is suing too. [0] As someone with one foot in retail, I can honestly say these cards are not doing anyone any favors. Fraud is rampant and there are shoppers that travel the world [0.5] with stolen cards just to spend stolen cards and gift cards [1]. During the transition to chip, Square had liability shift for non-chip cards [2], but we failed to meet the requirements for a few transactions because we insisted on entering the ZIP for security, which requires key entry even at an additional fee. There was no feature to enable ZIP code entry for swipes. In these cases, trying to heighten security with additional measures was the wrong move for us. We should have just let them swipe and Square eat the cost. Apple has been burying a scandal of its own with Apple Pay fraud. Once after a shopper left, we immediately received negative feedback through Square from someone claiming they didn't just buy anything from our store. Well, when someone has a phone, there is nothing to check. Though Apple Stores seem to have been hit hard, which seems appropriate [3]. The main problems are, 1) as retailers we cannot treat every customer as a crook nor can we profile them [4], 2) if they jump through all the hurdles, we can't then not sell them something even if something seems odd, and 3) in the case of Apple Pay, gift cards, and some swipe transactions, retailers are actually covered so even if buyers appear suspect, there is zero incentive to call them out, 4) the police don't treat it as shoplifting, and 5) some of the worst offenders are not suspicious at all, and can even be contesting their own purchases on purpose. This is just a fact, but most of the scammers that came through our store were from NY and were black (again, just a fact, not saying anything about race or NY, though something does seem to be going on there [4][5]). -- [0] http://www.wsj.com/articles/wal-mart-sues-visa-over-chip-enabled-debit-card-transactions-1462906677 http://www.wsj.com/articles/wal-mart-sues-visa-over-chip-ena... [0.5] http://arstechnica.com/tech-policy/2014/11/authorities-arrest-118-people-in-airline-ticket-fraud-sting/ http://arstechnica.com/tech-policy/2014/11/authorities-arres... [1] http://www.tripwire.com/state-of-security/risk-based-security-for-executives/risk-management/gift-card-fraud-how-its-committed-and-why-its-so-lucrative/ http://www.tripwire.com/state-of-security/risk-based-securit... [2] https://squareup.com/news/why-square-sellers-can-rest-easy-about-the-liability-shift https://squareup.com/news/why-square-sellers-can-rest-easy-a... [3] http://www.nytimes.com/2015/03/17/business/banks-find-fraud-abounds-in-apple-pay.html http://www.nytimes.com/2015/03/17/business/banks-find-fraud-... [4] http://www.ag.ny.gov/press-release/ag-schneiderman-announces-agreement-barneys-new-york-address-discrimination-against http://www.ag.ny.gov/press-release/ag-schneiderman-announces... [5] http://nypost.com/2016/04/26/rappers-used-stolen-credit-cards-to-cheat-department-stores/ http://nypost.com/2016/04/26/rappers-used-stolen-credit-card...

tosseraccount 10y ago

American Express sued Visa and Mastercard in 2004: http://www.nbcnews.com/id/6494456/ns/business-us_business/t/american-express-sues-visa-mastercard/ http://www.nbcnews.com/id/6494456/ns/business-us_business/t/... They settled in 2007 : http://www.nytimes.com/2008/06/26/business/26credit.html http://www.nytimes.com/2008/06/26/business/26credit.html Mastercard paid $1.8 billion, Visa paid $2.1 billion MA and V have way outperformed AXP since.

ccvannorman 10y ago

I wish that the shopping experience was 1) I go to a store and pick up what I need 2) I walk out of the store with everything and take it home 3) Store knows what I took (RFID tags) 4) Store knows who I am (Cameras, gait analysis, face, whatever, fingerprint at the door, phone swipe, credit card swipe, be creative) 5) I receive an e-bill when the vendor identifies me 6) I set up an auto-pay on my e-bill Honestly, tap-to-pay doesn't seem like any difference at all vs cash or credit to me. Show me something where I don't even need to interact on exiting the store!

hinkley 10y ago
The original pitch for the RFIDs was that they'd just be able to scan your whole cart. I'm not sure what happened in the interim.
- seanp2k2 10y ago
  RFID didn't work reliably from more than a few inches away and with that many items? Tagging every item including bulk things like produce was a non-starter for merchants due to all the extra labor involved? RFID tags cost much more than the barcode already on product packaging? Check out hardware for this was massively expensive, didn't integrate with existing lane systems smoothly, confused consumers, was largely unavailable due to lack of demand, and was super buggy / unreliable? Those are all guesses but they all seem likely to me.
  - TillE 10y ago
    > from more than a few inches away Nah, you can always crank up the power in line with the inverse square law. Your other reasons are plausible. RFID tags are fairly cheap, but they can't compete with printing a barcode on a label.
- ploxiln 10y ago
  I'm sure a few of the engineers knew that would never happen. But it's someone else's job to sell the tech to businesses, and the stock to wallstreet ...

crb002 10y ago

Every chip reader in Des Moines uses the same reader hardware, and every software install on them is radically different. Somebody is making bank writing the glitchy touch screen apps.

ArkyBeagle 10y ago

This seems similar to WalMart's recent decision to stop taking some credit cards in Canada. https://news.ycombinator.com/item?id=11887469 https://news.ycombinator.com/item?id=11887469

callmeed 10y ago

Where I am in California only about 1/3 of merchants are accepting chip cards (even though I believe the deadline was October of last year).

jdeibele 10y ago

I received a debit card from my relatively small credit union a few days ago. I was very surprised to see that it didn't have a chip in it. It seems likely that the fees they earn from "signature transactions" must be significant enough that they don't want anyone using it as a chip card. An alternative answer is that the cost of the cards themselves is so much that they don't want to do it. When I lost my wallet, a different credit union charged me $10 for a replacement card. And neither had a chip. The other banks did it for free.

robbiet480 10y ago
When this article mentions "signature transactions" it is speaking of "chip and sig(nature)", meaning that you must insert or "dip" the chip-enabled card into a terminal and then sign on the terminal. The signature is submitted to your bank along with the transaction for verification. "chip and PIN" is much the same, except that you must enter a PIN instead of signing, and the PIN is sent to your bank for verification. I would also add that signature verification doesn't really do much, since banks will accept just about anything as your authorized signature. A signature is also not required for transactions under $25 (usually, depends on the merchant and specific minimums that your issuing bank sets). It is quite weird that you don't have a chip card, since it is mandated to only provide chip enabled cards as of October 2016. I would ask your credit union for the reasoning behind not issuing you one.

frandroid 10y ago

This seems like part of the global retailer war against credit card companies, such as seen here in Canada: https://www.thestar.com/news/canada/2016/06/11/walmart-canada-will-no-longer-accept-visa-due-to-high-fees.html https://www.thestar.com/news/canada/2016/06/11/walmart-canad...

willhamina 10y ago

I've gone to cash whereever possible. I needn't monitor my CC accounts so closely, reconcile them at end-of-month nor worry about stolen cards. Sellers love cash. Best of all I spend far less - I am more parsimonious if I pay with cash.

rietta 10y ago

Site without a paywall - http://www.ajc.com/news/business/home-depot-visa-and-mastercard-are-colluding-on-ca/nrgMZ/ http://www.ajc.com/news/business/home-depot-visa-and-masterc...

deleted 10y ago

[deleted]

FollowSteph3 10y ago

I'm surprised the discussion isn't focused on the 3% fee, it's almost not discussed. Think about that, that's 3% of all retail transactions for electronic processing. And their not even liable for charge backs, that's paid by the vendor. Another thing to realize, most credit cards have some kind of reward program that amounts to about a 1% payout. That's coming out of the transaction fees, which if you do the math is actually being paid for by the merchant. If the fees were 2% there would no longer be rewards programs. I find that interesting. The retail world is being taxed to pay the credit xard reward programs of their customers. Makes you think a bit doesn't it ;)

optforfon 10y ago

It's interesting how in China they kinda leapfrogged credit cards all together (they still exist, but they're not ubiquitous). Here it's either cash or payments through phones and QR codes using Alipay/Wechat/etc. It's pretty fantastic and there is very little lock in like b/c these aren't hardware-centric technologies. Just download an app, connect it to a bank account and you're good to go (both merchant and customer). So competitors are free to disrupt all they want. Meanwhile parasites like Visa skim an insane 3% off of the whole US retail economy. How this isn't banned by the government is beyond me... I'm sure it rivals the sales tax in some jurisdictions.

pbreit 10y ago

Oh, dear, Home Depot, please, no. Chip & PIN is the worst user experience of all of them.

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