5 ms·

Absolutely support passing crap like this on to customers. Otherwise there is no incentive to lower them.

by lstodd 8y ago

toomuchtodo 8y ago
Conversely, we could regulate and treat card networks as utilities (allowing them to recoup reasonable operations costs) instead of for-profit concerns siphoning unnecessarily off of the flows of capitalism. It works for Europe. Customers regulating through voting with their wallet isn't going to work with how much power large financial firms wield. I contacted Elizabeth Warren's office (she's on the Senate Banking Committee); if this matters to you, I suggest you do too!
- dragonwriter 8y ago
  > I contacted Elizabeth Warren's office (she's on the Senate Banking Committee); if this matters to you, I suggest you do too! Unless you've also got a plan to get a Democratic majority in the Senate, your plan probably needs to extend beyond Warren if you are relying on her role in the Banking Committee (if you are expecting her to win the Presidency in 2020, that's perhaps another story.)
  - toomuchtodo 8y ago
    > your plan probably needs to extend beyond Warren if you are relying on her role in the Banking Committee (if you are expecting her to win the Presidency in 2020, that's perhaps another story.) It does. No need to pollute this thread, email me if you want to chat about it.
  - deleted 8y ago
    [deleted]
- deleted 8y ago
  [deleted]
ip26 8y ago
What's hypothetically supposed to happen is the payment vendors compete with eachother for traffic, and businesses negotiate deals and use the ones that give a good deal. Whether it's actually working that way in practice, of course, is a valid question.
- AnthonyMouse 8y ago
  The problem is network effects. If you accept Visa or Mastercard then you lose business, because many customers have only one or the other. So you need both, which means you can't play them off each other for a better deal and they aren't actually competing with each other. Combine this with contract terms in many places preventing merchants from passing on fees and it gets even worse, because card networks can gain customers and increase their network size by offering rewards and then use the network effect to raise fees. If the merchant can't charge more to customers whose card network charges them higher fees, the cardholder has the incentive to use the card with the highest rewards (and thus the highest fees), so you get a ratchet of increasing processing fees despite an overall trend of falling underlying processing costs due to automation.
  - ip26 8y ago
    Speaking purely hypothetically, it's easy for a customer to carry both a Visa & MC, so if stores more frequently took only one or the other, customers would respond accordingly. Like they already do with AmEx, or when traveling internationally (where MC has a big leg up).
    - AnthonyMouse 8y ago
      But that's chicken and egg. Collective action problem. You can't stop accepting one or the other until the large majority of customers carry both, which they won't do while most vendors continue to accept both thereby allowing the cardholder to only need one.
      - CardFellow 8y ago
anonymous5133 8y ago
Completely agree and it also punishes people who pay with cash because we all have to indirectly pay for the processing fees of others.
- m-s 8y ago
  One could also say that the costs of using cash are being passed on to card-paying customers
ryandrake 8y ago
Companies should feel free to not accept credit cards, but if they do accept them, it becomes a cost of doing business, and I, as a card user, expect to not be penalized for using one. Providing parking is also a cost of doing business. I don't see any arguments in favor of merchants charging car-driving customers more than walk-ins.

Absolutely support passing crap like this on to customers. Otherwise there is no incentive to lower them.

by lstodd 8y ago

Absolutely support passing crap like this on to customers. Otherwise there is no incentive to lower them.

Conversely, we could regulate and treat card networks as utilities (allowing them to recoup reasonable operations costs) instead of for-profit concerns siphoning unnecessarily off of the flows of capitalism. It works for Europe. Customers regulating through voting with their wallet isn't going to work with how much power large financial firms wield. I contacted Elizabeth Warren's office (she's on the Senate Banking Committee); if this matters to you, I suggest you do too!

dragonwriter 8y ago
> I contacted Elizabeth Warren's office (she's on the Senate Banking Committee); if this matters to you, I suggest you do too! Unless you've also got a plan to get a Democratic majority in the Senate, your plan probably needs to extend beyond Warren if you are relying on her role in the Banking Committee (if you are expecting her to win the Presidency in 2020, that's perhaps another story.)
- toomuchtodo 8y ago
  > your plan probably needs to extend beyond Warren if you are relying on her role in the Banking Committee (if you are expecting her to win the Presidency in 2020, that's perhaps another story.) It does. No need to pollute this thread, email me if you want to chat about it.
- deleted 8y ago
  [deleted]
deleted 8y ago
[deleted]

ip26 8y ago

What's hypothetically supposed to happen is the payment vendors compete with eachother for traffic, and businesses negotiate deals and use the ones that give a good deal. Whether it's actually working that way in practice, of course, is a valid question.

AnthonyMouse 8y ago
The problem is network effects. If you accept Visa or Mastercard then you lose business, because many customers have only one or the other. So you need both, which means you can't play them off each other for a better deal and they aren't actually competing with each other. Combine this with contract terms in many places preventing merchants from passing on fees and it gets even worse, because card networks can gain customers and increase their network size by offering rewards and then use the network effect to raise fees. If the merchant can't charge more to customers whose card network charges them higher fees, the cardholder has the incentive to use the card with the highest rewards (and thus the highest fees), so you get a ratchet of increasing processing fees despite an overall trend of falling underlying processing costs due to automation.
- ip26 8y ago
  Speaking purely hypothetically, it's easy for a customer to carry both a Visa & MC, so if stores more frequently took only one or the other, customers would respond accordingly. Like they already do with AmEx, or when traveling internationally (where MC has a big leg up).
  - AnthonyMouse 8y ago
    But that's chicken and egg. Collective action problem. You can't stop accepting one or the other until the large majority of customers carry both, which they won't do while most vendors continue to accept both thereby allowing the cardholder to only need one.
    - CardFellow 8y ago

anonymous5133 8y ago

Completely agree and it also punishes people who pay with cash because we all have to indirectly pay for the processing fees of others.

m-s 8y ago
One could also say that the costs of using cash are being passed on to card-paying customers

ryandrake 8y ago

Companies should feel free to not accept credit cards, but if they do accept them, it becomes a cost of doing business, and I, as a card user, expect to not be penalized for using one. Providing parking is also a cost of doing business. I don't see any arguments in favor of merchants charging car-driving customers more than walk-ins.