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Well if we really believed in the free market and consumer protection, there'd be a law requiring the total transaction cost be printed on the sales slip. Wheth

by cmurf 10y ago

Well if we really believed in the free market and consumer protection, there'd be a law requiring the total transaction cost be printed on the sales slip. Whether the merchant pays it or passes it onto the consumer would be up to the merchant, but the amount would appear on the slip so the consumer sees these costs and who is paying for it. What we really have is mercantilism, where the issuer by contract disallows full information to be conveyed to the consumer without the consumer's consent, and this is in effect protected by law by the fact it isn't illegal. You could also call it an example of chrony capitalism.

JoBrad 10y ago
I'm not sure I follow you. Are you suggesting that we should require merchants to print a breakout of all of the upstream fees on your receipt?
- cmurf 10y ago
  Yes. And as a precondition that this information is exposed by the issuer when the authorization is created so the POS can provide the correct information. Right now this is obscured, the merchant doesn't know what fees applied to which cards until their monthly closing statement.
  - JoBrad 10y ago
    That's a lot of info to have to expose in a very short period of time. It also would involve integrating payment/contract info into systems that probably have no knowledge of it, today. How many APIs do you know of that access contract payment details every time they are accessed?
JoshTriplett 10y ago
> Well if we really believed in the free market and consumer protection, there'd be a law requiring the total transaction cost be printed on the sales slip. So "if we really believed in the free market", we should regulate the details of how a private transaction can take place? Leaving aside any other aspects of that proposal, whether positive or negative, it doesn't seem reasonable to describe it as "free market".
- fauigerzigerk 10y ago
  >So "if we really believed in the free market", we should regulate the details of how a private transaction can take place? The information that has to be expressly stated as part of a contract is not some minor detail. It is at the very core of enabling free markets in the first place. Some seem to think of free markets as a sort of natural phenomenon and of regulations as a distortion. But that isn't true at all. Contracts, property rights and the responsibilities of all participants in a trade are concepts of law. Without them you would have to rely on implicit cultural conventions and resolve disputes by means of duels and vendettas.
- nothrabannosir 10y ago
  Free market doesn't mean freedom from regulation, it means freedom to compete. When lack of regulation enables a (set of) actors to make competition harder, you can make a market "freeer" by introducing regulation. Making it explicit to customers with debit cards that they're subsidising the rewards of other customers will [edit: "could"!] incentivise them to demand lower fees, for example. This is a free market at its best.
- losvedir 10y ago
  > So "if we really believed in the free market", we should regulate the details of how a private transaction can take place? Yes. I don't think "free market" is incredibly well defined but the concept it evokes to me (as someone with a degree in economics), is a market approaching perfect competition[0], which is well defined. A perfectly competitive market has a number of requirements, things like low barriers to entry, lots of buyers and sellers, no externalities, and so on. A government policy that intervenes to try to aid perfect competition (e.g. some anti-trust legislation) could still be called a "free market", I think. That said, I realize some people seem to define it to mean "free" from all government interventions, but they don't have a monopoly (heh) on the use of the word. [0] https://en.wikipedia.org/wiki/Perfect_competition https://en.wikipedia.org/wiki/Perfect_competition
- cmurf 10y ago
  Free markets are not devoid of regulation; in fact free markets are not naturally occurring, it is created by regulation. Otherwise you end up with all kinds of obfuscation, which makes it impossible for people to make informed decisions.
abalone 10y ago
No longer. Merchants can elect to publish and pass fees to customers. Durbin amendment legalized it. Didn't change anything though. Pretty much no one does it for competitive reasons.

by cmurf 10y ago

JoBrad 10y ago

I'm not sure I follow you. Are you suggesting that we should require merchants to print a breakout of all of the upstream fees on your receipt?

cmurf 10y ago
Yes. And as a precondition that this information is exposed by the issuer when the authorization is created so the POS can provide the correct information. Right now this is obscured, the merchant doesn't know what fees applied to which cards until their monthly closing statement.
- JoBrad 10y ago
  That's a lot of info to have to expose in a very short period of time. It also would involve integrating payment/contract info into systems that probably have no knowledge of it, today. How many APIs do you know of that access contract payment details every time they are accessed?

JoshTriplett 10y ago

> Well if we really believed in the free market and consumer protection, there'd be a law requiring the total transaction cost be printed on the sales slip. So "if we really believed in the free market", we should regulate the details of how a private transaction can take place? Leaving aside any other aspects of that proposal, whether positive or negative, it doesn't seem reasonable to describe it as "free market".

fauigerzigerk 10y ago
>So "if we really believed in the free market", we should regulate the details of how a private transaction can take place? The information that has to be expressly stated as part of a contract is not some minor detail. It is at the very core of enabling free markets in the first place. Some seem to think of free markets as a sort of natural phenomenon and of regulations as a distortion. But that isn't true at all. Contracts, property rights and the responsibilities of all participants in a trade are concepts of law. Without them you would have to rely on implicit cultural conventions and resolve disputes by means of duels and vendettas.
nothrabannosir 10y ago
Free market doesn't mean freedom from regulation, it means freedom to compete. When lack of regulation enables a (set of) actors to make competition harder, you can make a market "freeer" by introducing regulation. Making it explicit to customers with debit cards that they're subsidising the rewards of other customers will [edit: "could"!] incentivise them to demand lower fees, for example. This is a free market at its best.
losvedir 10y ago
> So "if we really believed in the free market", we should regulate the details of how a private transaction can take place? Yes. I don't think "free market" is incredibly well defined but the concept it evokes to me (as someone with a degree in economics), is a market approaching perfect competition[0], which is well defined. A perfectly competitive market has a number of requirements, things like low barriers to entry, lots of buyers and sellers, no externalities, and so on. A government policy that intervenes to try to aid perfect competition (e.g. some anti-trust legislation) could still be called a "free market", I think. That said, I realize some people seem to define it to mean "free" from all government interventions, but they don't have a monopoly (heh) on the use of the word. [0] https://en.wikipedia.org/wiki/Perfect_competition https://en.wikipedia.org/wiki/Perfect_competition
cmurf 10y ago
Free markets are not devoid of regulation; in fact free markets are not naturally occurring, it is created by regulation. Otherwise you end up with all kinds of obfuscation, which makes it impossible for people to make informed decisions.

abalone 10y ago

No longer. Merchants can elect to publish and pass fees to customers. Durbin amendment legalized it. Didn't change anything though. Pretty much no one does it for competitive reasons.