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idk why you're downvoted; australia did exactly that recently - there's now a federal law capping credit card interchange fees at 0.8% maximum. The EU is now 0.

idk why you're downvoted; australia did exactly that recently - there's now a federal law capping credit card interchange fees at 0.8% maximum. The EU is now 0.3% max. Of course that means that you dont get so many fancy rewards benefits, but thats kinda silly anyway (getting ~1% back in rewards in exchange for a ~3% tax on everything) EDIT: also, it feels very discriminatory. Well off people get the fancy cards with the biggest kickbacks, poor people get shitty cards with no benefits, but everyone pays the hidden 3% tax....

lotsofpulp 8y ago
As long as vendors are free to offer different pricing based on payment method, it should resolve itself. Even right now, I don’t think there’s is anything stopping vendors from offering everyone x% off by using debit cards.
- FabHK 8y ago
  > long as vendors are free to offer different pricing based on payment method My understanding is that the merchant agreement the vendor has with the credit card company prohibits that.
  - lotsofpulp 8y ago
    FTC website says different: https://www.ftc.gov/tips-advice/business-center/guidance/new-rules-electronic-payments-lower-costs-retailers https://www.ftc.gov/tips-advice/business-center/guidance/new... >Discounts to Customers A PCN cannot stop you from offering your customers a discount or another incentive for using a certain method of payment, as long as you offer it to all your customers and disclose the offer clearly and conspicuously. For example, you can offer your customers a discount or a coupon if they pay with cash or a debit card rather than a credit card.
- gbrown 8y ago
  There was just a lawsuit about that, and it went... poorly. https://www.washingtonpost.com/business/economy/supreme-court-sides-with-amex-in-lawsuit-over-rules-for-merchants/2018/06/25/c6118978-7887-11e8-80be-6d32e182a3bc_story.html?utm_term=.839374618eb1 https://www.washingtonpost.com/business/economy/supreme-cour...
  - lotsofpulp 8y ago
    I think that only applies to other credit cards, but not debit cards or cash: https://www.ftc.gov/tips-advice/business-center/guidance/new-rules-electronic-payments-lower-costs-retailers https://www.ftc.gov/tips-advice/business-center/guidance/new... >Discounts to Customers A PCN cannot stop you from offering your customers a discount or another incentive for using a certain method of payment, as long as you offer it to all your customers and disclose the offer clearly and conspicuously. For example, you can offer your customers a discount or a coupon if they pay with cash or a debit card rather than a credit card.
    - gbrown 8y ago
      Still, that kills any incentive for fee competition between cards - they all share the benefits of being convenient and face little pressure to change the fee structure.
      - lotsofpulp 8y ago
        But it’s not stopping the merchants from offering discounts for debit and cash, debit cards of which have capped fees and are very cheap to process. Merchants are choosing not to give those customers discounts.
- maxxxxx 8y ago
  "As long as vendors are free to offer different pricing based on payment method, it should resolve itself." Credit card companies do everything they can to block this.
  - lotsofpulp 8y ago
    I was under the assumption that this is still in effect: https://www.ftc.gov/tips-advice/business-center/guidance/new-rules-electronic-payments-lower-costs-retailers https://www.ftc.gov/tips-advice/business-center/guidance/new... >Discounts to Customers A PCN cannot stop you from offering your customers a discount or another incentive for using a certain method of payment, as long as you offer it to all your customers and disclose the offer clearly and conspicuously. For example, you can offer your customers a discount or a coupon if they pay with cash or a debit card rather than a credit card.
- leesalminen 8y ago
  You can do it with credit cards as well. The trick is that the merchant must frame it as a “cash discount” and not a “card surcharge”. This means that the prices posted are the “full price” and then you can discount it on the cash. There’s been a lot of back and forth on this over recent years, but this is my understanding of what’s currently allowed. Could change tomorrow if Visa changes their mind.
  - lotsofpulp 8y ago
    The FTC's website clearly says the merchant is free to offer a discount for different methods of payment, such as cash or debit card, so I don't think Visa has any power here. https://www.ftc.gov/tips-advice/business-center/guidance/new-rules-electronic-payments-lower-costs-retailers https://www.ftc.gov/tips-advice/business-center/guidance/new...
tfehring 8y ago
> Of course that means that you dont get so many fancy rewards benefits, but thats kinda silly anyway (getting ~1% back in rewards in exchange for a ~3% tax on everything) It's definitely kind of silly and it's definitely regressive, but your numbers are off. In reality, I get ~2% back in rewards in exchange for a ~0.25% tax on everything. The math for this works out because most transactions aren't made with credit cards. https://www.bostonfed.org/publications/public-policy-discussion-paper/2010/who-gains-and-who-loses-from-credit-card-payments-theory-and-calibrations.aspx https://www.bostonfed.org/publications/public-policy-discuss... I'd still support regulation that addresses this - either by directly capping interchange fees or using a different approach - but I personally won't be better off because of it.
- dalyons 8y ago
  fair point on the debit lowering the effective "tax". I'll point to my edit and restate that its better for you, because you're well-off enough to get a 2%-back card. I'm guessing that the average across all cards/americans is much lower than 2%. (i'm an immigrant to the US, and for the first few years all you can get is the crappy starter cards available to people with poor/no credit, that have no benefits. These days, im in your boat - i qualify for the fancier cards so im essentially making money of the back of everyone that doesnt. So i would be worse off too, but i think thats fine)

lotsofpulp 8y ago

As long as vendors are free to offer different pricing based on payment method, it should resolve itself. Even right now, I don’t think there’s is anything stopping vendors from offering everyone x% off by using debit cards.

FabHK 8y ago
> long as vendors are free to offer different pricing based on payment method My understanding is that the merchant agreement the vendor has with the credit card company prohibits that.
- lotsofpulp 8y ago
  FTC website says different: https://www.ftc.gov/tips-advice/business-center/guidance/new-rules-electronic-payments-lower-costs-retailers https://www.ftc.gov/tips-advice/business-center/guidance/new... >Discounts to Customers A PCN cannot stop you from offering your customers a discount or another incentive for using a certain method of payment, as long as you offer it to all your customers and disclose the offer clearly and conspicuously. For example, you can offer your customers a discount or a coupon if they pay with cash or a debit card rather than a credit card.
gbrown 8y ago
There was just a lawsuit about that, and it went... poorly. https://www.washingtonpost.com/business/economy/supreme-court-sides-with-amex-in-lawsuit-over-rules-for-merchants/2018/06/25/c6118978-7887-11e8-80be-6d32e182a3bc_story.html?utm_term=.839374618eb1 https://www.washingtonpost.com/business/economy/supreme-cour...
- lotsofpulp 8y ago
  I think that only applies to other credit cards, but not debit cards or cash: https://www.ftc.gov/tips-advice/business-center/guidance/new-rules-electronic-payments-lower-costs-retailers https://www.ftc.gov/tips-advice/business-center/guidance/new... >Discounts to Customers A PCN cannot stop you from offering your customers a discount or another incentive for using a certain method of payment, as long as you offer it to all your customers and disclose the offer clearly and conspicuously. For example, you can offer your customers a discount or a coupon if they pay with cash or a debit card rather than a credit card.
  - gbrown 8y ago
    Still, that kills any incentive for fee competition between cards - they all share the benefits of being convenient and face little pressure to change the fee structure.
    - lotsofpulp 8y ago
      But it’s not stopping the merchants from offering discounts for debit and cash, debit cards of which have capped fees and are very cheap to process. Merchants are choosing not to give those customers discounts.
maxxxxx 8y ago
"As long as vendors are free to offer different pricing based on payment method, it should resolve itself." Credit card companies do everything they can to block this.
- lotsofpulp 8y ago
  I was under the assumption that this is still in effect: https://www.ftc.gov/tips-advice/business-center/guidance/new-rules-electronic-payments-lower-costs-retailers https://www.ftc.gov/tips-advice/business-center/guidance/new... >Discounts to Customers A PCN cannot stop you from offering your customers a discount or another incentive for using a certain method of payment, as long as you offer it to all your customers and disclose the offer clearly and conspicuously. For example, you can offer your customers a discount or a coupon if they pay with cash or a debit card rather than a credit card.
leesalminen 8y ago
You can do it with credit cards as well. The trick is that the merchant must frame it as a “cash discount” and not a “card surcharge”. This means that the prices posted are the “full price” and then you can discount it on the cash. There’s been a lot of back and forth on this over recent years, but this is my understanding of what’s currently allowed. Could change tomorrow if Visa changes their mind.
- lotsofpulp 8y ago
  The FTC's website clearly says the merchant is free to offer a discount for different methods of payment, such as cash or debit card, so I don't think Visa has any power here. https://www.ftc.gov/tips-advice/business-center/guidance/new-rules-electronic-payments-lower-costs-retailers https://www.ftc.gov/tips-advice/business-center/guidance/new...

tfehring 8y ago

> Of course that means that you dont get so many fancy rewards benefits, but thats kinda silly anyway (getting ~1% back in rewards in exchange for a ~3% tax on everything) It's definitely kind of silly and it's definitely regressive, but your numbers are off. In reality, I get ~2% back in rewards in exchange for a ~0.25% tax on everything. The math for this works out because most transactions aren't made with credit cards. https://www.bostonfed.org/publications/public-policy-discussion-paper/2010/who-gains-and-who-loses-from-credit-card-payments-theory-and-calibrations.aspx https://www.bostonfed.org/publications/public-policy-discuss... I'd still support regulation that addresses this - either by directly capping interchange fees or using a different approach - but I personally won't be better off because of it.

dalyons 8y ago
fair point on the debit lowering the effective "tax". I'll point to my edit and restate that its better for you, because you're well-off enough to get a 2%-back card. I'm guessing that the average across all cards/americans is much lower than 2%. (i'm an immigrant to the US, and for the first few years all you can get is the crappy starter cards available to people with poor/no credit, that have no benefits. These days, im in your boat - i qualify for the fancier cards so im essentially making money of the back of everyone that doesnt. So i would be worse off too, but i think thats fine)