5 ms·

Everything everyone buys is a percent or two higher. This behavior should really be considered antisocial. GP is taking advantage of the system for their own pe

Everything everyone buys is a percent or two higher. This behavior should really be considered antisocial. GP is taking advantage of the system for their own personal (moderate) gain to the (very small) detriment of everyone else.

ForHackernews 8y ago
Sadly, that pretty much describes most successful businesses on the internet today.
FiveSquared 8y ago
Then if I walk in front of my neighbor’s driveway, I will take advantage of the system for my own personal gain to the detriment of the neighbors!
dguo 8y ago
Seems like a good example of "concentrated benefits versus diffuse costs." https://en.wikipedia.org/wiki/The_Logic_of_Collective_Action https://en.wikipedia.org/wiki/The_Logic_of_Collective_Action
megaman8 8y ago
The problem isn't the consumer who takes advantage of the system. the problem is the regulations that prevent consumers from choosing whether they want to pay that extra 2-3% that credit card companies charge the merchant. Right now, if i want to pay with cash, I still end up paying that extra 2-3%, even if the merchant wants to give me a 2-3% discount, they're not allowed, due to those regulations.
- Domenic_S 8y ago
  It's payment network agreements, not regulations in the government sense. E.G. If you accept Visa, you cannot mark up credit transactions & discount for cash per your agreement with them. It's nuanced (gas stations do it compliantly by advertising both prices next to each other). More info: https://www.pymnts.com/visa/2018/non-compliant-cash-discount-card-fees/ https://www.pymnts.com/visa/2018/non-compliant-cash-discount...
  - zAy0LfpBZLC8mAC 8y ago
    But that is a sign of a lack of regulation, as that is obviously anticompetetive behavior (demanding that a competing product cannot be sold cheaper).
    - Domenic_S 8y ago
      It's the same product being sold, not a competing product. And as a merchant, you aren't required by any law to accept Visa, or credit cards of any kind. Many merchants don't accept Amex, for example, because their fees are a few points higher than competing networks.
      - zAy0LfpBZLC8mAC 8y ago
        Cash and Mastercard are competing products, and Mastercard requiring the merchant to sell payment with cash at the same price as payment with Mastercard is obviously anti-competetive. Whether the merchant has the choice to not offer a particular product is irrelevant.
- deleted 8y ago
  [deleted]
Marsymars 8y ago
Tragedy of the commons.
ac29 8y ago
That assumes the cost of cash handling is zero (or close to it), which isn't true. When I worked retail around the turn of the century, here's an estimate of the time added by cash handling: - 5-10 minutes at beginning and end of shift to count cash drawers in and out, and make deposit bags, per employee - 10-15 seconds per cash transaction to count payment and make change - 60 minutes to prepare daily cash bank deposit and restock change (once, done by a supervisor) - Employee theft from cash drawers, while not a common issue, did happen probably at least once a year Now, I couldn't say if that all adds up to an extra 1-2% overhead, but I think its disingenuous for people to suggest that merchant fees charged by credit cards have little to no benefit to retailers. I think we'll see way more businesses go to electronic payments only within 10 years or so.
- Mediterraneo10 8y ago
  Three of the four problems in your list of cash-handling downsides are solved in some places through self-service checkouts where the machine automatically counts the cash and dispenses change, so a human doesn’t have to. Sometimes there is an actual human at the checkout, but when you wish to pay with cash, you are directed to put the money into a machine placed there, so that the cashier does not have to actually handle cash. In recent months I have seen the latter system (human cashier + cash-handling machine) in a Madrid airport restaurant and a Romanian hypermarket.
  - ac29 8y ago
    If the company servicing these cash machines charges 0%, sure. I'd bet they end up charging fees close to what credit cards charge, though.
perl4ever 8y ago
You can look at it as interest that's not disclosed or as a service fee for handling transactions. It's not obvious that an explicit fee for either would be lower. I think people have claimed that when the experiment was done by capping fees, things don't get cheaper, so your viewpoint may not be accurate.

ForHackernews 8y ago

Sadly, that pretty much describes most successful businesses on the internet today.

FiveSquared 8y ago

Then if I walk in front of my neighbor’s driveway, I will take advantage of the system for my own personal gain to the detriment of the neighbors!

dguo 8y ago

Seems like a good example of "concentrated benefits versus diffuse costs." https://en.wikipedia.org/wiki/The_Logic_of_Collective_Action https://en.wikipedia.org/wiki/The_Logic_of_Collective_Action

megaman8 8y ago

The problem isn't the consumer who takes advantage of the system. the problem is the regulations that prevent consumers from choosing whether they want to pay that extra 2-3% that credit card companies charge the merchant. Right now, if i want to pay with cash, I still end up paying that extra 2-3%, even if the merchant wants to give me a 2-3% discount, they're not allowed, due to those regulations.

Domenic_S 8y ago
It's payment network agreements, not regulations in the government sense. E.G. If you accept Visa, you cannot mark up credit transactions & discount for cash per your agreement with them. It's nuanced (gas stations do it compliantly by advertising both prices next to each other). More info: https://www.pymnts.com/visa/2018/non-compliant-cash-discount-card-fees/ https://www.pymnts.com/visa/2018/non-compliant-cash-discount...
- zAy0LfpBZLC8mAC 8y ago
  But that is a sign of a lack of regulation, as that is obviously anticompetetive behavior (demanding that a competing product cannot be sold cheaper).
  - Domenic_S 8y ago
    It's the same product being sold, not a competing product. And as a merchant, you aren't required by any law to accept Visa, or credit cards of any kind. Many merchants don't accept Amex, for example, because their fees are a few points higher than competing networks.
    - zAy0LfpBZLC8mAC 8y ago
      Cash and Mastercard are competing products, and Mastercard requiring the merchant to sell payment with cash at the same price as payment with Mastercard is obviously anti-competetive. Whether the merchant has the choice to not offer a particular product is irrelevant.
deleted 8y ago
[deleted]

Marsymars 8y ago

Tragedy of the commons.

ac29 8y ago

That assumes the cost of cash handling is zero (or close to it), which isn't true. When I worked retail around the turn of the century, here's an estimate of the time added by cash handling: - 5-10 minutes at beginning and end of shift to count cash drawers in and out, and make deposit bags, per employee - 10-15 seconds per cash transaction to count payment and make change - 60 minutes to prepare daily cash bank deposit and restock change (once, done by a supervisor) - Employee theft from cash drawers, while not a common issue, did happen probably at least once a year Now, I couldn't say if that all adds up to an extra 1-2% overhead, but I think its disingenuous for people to suggest that merchant fees charged by credit cards have little to no benefit to retailers. I think we'll see way more businesses go to electronic payments only within 10 years or so.

Mediterraneo10 8y ago
Three of the four problems in your list of cash-handling downsides are solved in some places through self-service checkouts where the machine automatically counts the cash and dispenses change, so a human doesn’t have to. Sometimes there is an actual human at the checkout, but when you wish to pay with cash, you are directed to put the money into a machine placed there, so that the cashier does not have to actually handle cash. In recent months I have seen the latter system (human cashier + cash-handling machine) in a Madrid airport restaurant and a Romanian hypermarket.
- ac29 8y ago
  If the company servicing these cash machines charges 0%, sure. I'd bet they end up charging fees close to what credit cards charge, though.

perl4ever 8y ago

You can look at it as interest that's not disclosed or as a service fee for handling transactions. It's not obvious that an explicit fee for either would be lower. I think people have claimed that when the experiment was done by capping fees, things don't get cheaper, so your viewpoint may not be accurate.