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Visa and Mastercard have a pretty effective duopoly, too! Their fees and chargeback procedures are a drag on the entire economy. Getting banned by them effectiv

by Meekro 7y ago

Visa and Mastercard have a pretty effective duopoly, too! Their fees and chargeback procedures are a drag on the entire economy. Getting banned by them effectively kills your ability to accept payments, and many legal but politically unpopular businesses find themselves in the crosshairs.

deleted 7y ago
[deleted]
tomrod 7y ago
Is that right? I thought there were several payment service providers and interchange networks.
- lotsofpulp 7y ago
  Visa/MC/Amex/Discover for Americans, with Visa being far in the lead.
mailslot 7y ago
Can we include Equifax, Experian, and TransUnion to the list of monopolistic anti-competitive financial companies?
- bilbo0s 7y ago
  Not to put too fine a point on it, but we've almost immediately started down the road that HN user fyoving is cautioning us against. The idea that our government is going to go after financial firms is a bit fanciful. (In all honesty, legally speaking, fyoving is even correct in asserting that they aren't even going after tech firms.) When you're getting people's hopes up by making them think that something is going to happen, and then nothing happens. People immediately blame big banking, big finance, big tech, corrupt politicians, corruption in general, etc etc. Which is entirely understandable. People get upset at dashed hopes. They look for something or someone to blame. And to be fair, sometimes it's even true that corruption is part of the reason. But this time I have a strong suspicion fyoving is likely correct for a more systemic reason. Any sort of action against a lot of these companies, tech or finance, won't pass muster with the courts. It's not corruption, it's just the law. Which we can change, but it's really hard to do so because there are good reasons for some of these laws. (One way to address that problem though is to add new laws instead of changing the current ones, but there is going to be natural resistance against that too.) I suspect that's the entire reason a certain segment of politicians are trying to bring action against the tech giants within the parameters of current law. Because they know it won't work already. They know how the supremes will rule on any such actions. (Rulings the supremes won't even have to hand down because the agencies in question will probably decide against wasting the time taking any actions in the first place.) It's terrible. A likely diversion of 10 years minimum, during which no one will actually be able to gain any traction towards changing the laws because these elites will be wagging the dog making people think something is going to happen under current law. We should have pushed for changes in the law first. Then gone after the big businesses. But that was probably just a pipe dream of mine anyway. It was never gonna happen.
  - refurb 7y ago
    Are you arguing that politicians would spend ten years investigating companies with the full knowledge they won’t get anywhere with it beyond political brownie points? If so, I agree 100%.
    - briantakita 7y ago
      I agree < 100% as this is one of many benefits for a politician to take this stance. Another benefit is leverage over an industry. Leverage is a tool that can be used for different purposes. Even if the courts thwart one possible outcome, there are other possible outcomes.
- deleted 7y ago
  [deleted]
- Consultant32452 7y ago
  I'll go one level further and add the three bond ratings agencies that played front and center for the economic meltdown: Moody's, Fitch, and S&P.
- rellui 7y ago
  The shitty thing about Equifax is that there's no way to not be a part of their credit score system. For Visa and MC, I can choose to not use their cards and go with something else. With Equifax, I can't stop using their service to stifle their business. I'm amazed the government is not intervening in cases like these where the end consumers have no choice in the matter.
arcticbull 7y ago
Chargebacks are overwhelmingly positive. It allows you to use your credit card fearlessly knowing the card companies have your back. Truthfully, if they decreased payment volume or "dragged the economy" card companies wouldn't offer them.
- AnthonyMouse 7y ago
  The problem with chargebacks is that they're mandatory, even in cases where the seller is more trustworthy than the buyer. Then you end up with all the losses associated with buyer fraud even if the overwhelming majority of legitimate buyers would have enough faith in the seller to waive the ability to conduct a chargeback in exchange for a discount in the amount of the fee that has to be charged to cover them. The fee should be on the customer side and they should have a choice whether to pay it per transaction. Paying for insurance is fine, being forced to pay for it when you don't need it is not.
  - arcticbull 7y ago
    > The problem with chargebacks is that they're mandatory, even in cases where the seller is more trustworthy than the buyer. Then you end up with all the losses associated with buyer fraud even if the overwhelming majority of legitimate buyers would have enough faith in the seller to waive the ability to conduct a chargeback in exchange for a discount in the amount of the fee that has to be charged to cover them. This is actually accounted for in the merchant interchange rate. It varies by MCC (merchant category code) [and potentially merchant to merchant] and the frequency of chargebacks is built into how much the merchant pays for processing. Further, that bubbles up to the customer in terms of the pricing. Merchants may offer cash or other payment method discounts, so in a sense, what you're asking for already exists. Merchants do not opt into it because it's not in their interests. That said, that's not how the math works out. If a buyer has a number of chargebacks, the buyer may be investigated and has their account suspended or is charged with fraud. This works both ways. Again, merchants and payment networks are aligned in this case, both make money on greater transaction volume, this feature increases transaction volume, that's why it's there, otherwise it wouldn't be there. Also, paying per-transaction isn't really insurance as it leads to massive adverse selection risk. The most helpful chargeback for me personally was a two thousand dollar chargeback against Expedia where they refused to refund a refundable ticket. I filed a chargeback and I got the money back within a few days. It's a good thing, unless you've got data to back your case.
tracker1 7y ago
I'm pretty sure that they should be included as well here... the bigger issue is at what point, and to what extent should civil rights protections extend to publicly available platforms. ie Public Spaces in Private Ownership.

by Meekro 7y ago

deleted 7y ago

[deleted]

tomrod 7y ago

Is that right? I thought there were several payment service providers and interchange networks.

lotsofpulp 7y ago
Visa/MC/Amex/Discover for Americans, with Visa being far in the lead.

mailslot 7y ago

Can we include Equifax, Experian, and TransUnion to the list of monopolistic anti-competitive financial companies?

bilbo0s 7y ago
Not to put too fine a point on it, but we've almost immediately started down the road that HN user fyoving is cautioning us against. The idea that our government is going to go after financial firms is a bit fanciful. (In all honesty, legally speaking, fyoving is even correct in asserting that they aren't even going after tech firms.) When you're getting people's hopes up by making them think that something is going to happen, and then nothing happens. People immediately blame big banking, big finance, big tech, corrupt politicians, corruption in general, etc etc. Which is entirely understandable. People get upset at dashed hopes. They look for something or someone to blame. And to be fair, sometimes it's even true that corruption is part of the reason. But this time I have a strong suspicion fyoving is likely correct for a more systemic reason. Any sort of action against a lot of these companies, tech or finance, won't pass muster with the courts. It's not corruption, it's just the law. Which we can change, but it's really hard to do so because there are good reasons for some of these laws. (One way to address that problem though is to add new laws instead of changing the current ones, but there is going to be natural resistance against that too.) I suspect that's the entire reason a certain segment of politicians are trying to bring action against the tech giants within the parameters of current law. Because they know it won't work already. They know how the supremes will rule on any such actions. (Rulings the supremes won't even have to hand down because the agencies in question will probably decide against wasting the time taking any actions in the first place.) It's terrible. A likely diversion of 10 years minimum, during which no one will actually be able to gain any traction towards changing the laws because these elites will be wagging the dog making people think something is going to happen under current law. We should have pushed for changes in the law first. Then gone after the big businesses. But that was probably just a pipe dream of mine anyway. It was never gonna happen.
- refurb 7y ago
  Are you arguing that politicians would spend ten years investigating companies with the full knowledge they won’t get anywhere with it beyond political brownie points? If so, I agree 100%.
  - briantakita 7y ago
    I agree < 100% as this is one of many benefits for a politician to take this stance. Another benefit is leverage over an industry. Leverage is a tool that can be used for different purposes. Even if the courts thwart one possible outcome, there are other possible outcomes.
deleted 7y ago
[deleted]
Consultant32452 7y ago
I'll go one level further and add the three bond ratings agencies that played front and center for the economic meltdown: Moody's, Fitch, and S&P.
rellui 7y ago
The shitty thing about Equifax is that there's no way to not be a part of their credit score system. For Visa and MC, I can choose to not use their cards and go with something else. With Equifax, I can't stop using their service to stifle their business. I'm amazed the government is not intervening in cases like these where the end consumers have no choice in the matter.

arcticbull 7y ago

Chargebacks are overwhelmingly positive. It allows you to use your credit card fearlessly knowing the card companies have your back. Truthfully, if they decreased payment volume or "dragged the economy" card companies wouldn't offer them.

AnthonyMouse 7y ago
The problem with chargebacks is that they're mandatory, even in cases where the seller is more trustworthy than the buyer. Then you end up with all the losses associated with buyer fraud even if the overwhelming majority of legitimate buyers would have enough faith in the seller to waive the ability to conduct a chargeback in exchange for a discount in the amount of the fee that has to be charged to cover them. The fee should be on the customer side and they should have a choice whether to pay it per transaction. Paying for insurance is fine, being forced to pay for it when you don't need it is not.
- arcticbull 7y ago
  > The problem with chargebacks is that they're mandatory, even in cases where the seller is more trustworthy than the buyer. Then you end up with all the losses associated with buyer fraud even if the overwhelming majority of legitimate buyers would have enough faith in the seller to waive the ability to conduct a chargeback in exchange for a discount in the amount of the fee that has to be charged to cover them. This is actually accounted for in the merchant interchange rate. It varies by MCC (merchant category code) [and potentially merchant to merchant] and the frequency of chargebacks is built into how much the merchant pays for processing. Further, that bubbles up to the customer in terms of the pricing. Merchants may offer cash or other payment method discounts, so in a sense, what you're asking for already exists. Merchants do not opt into it because it's not in their interests. That said, that's not how the math works out. If a buyer has a number of chargebacks, the buyer may be investigated and has their account suspended or is charged with fraud. This works both ways. Again, merchants and payment networks are aligned in this case, both make money on greater transaction volume, this feature increases transaction volume, that's why it's there, otherwise it wouldn't be there. Also, paying per-transaction isn't really insurance as it leads to massive adverse selection risk. The most helpful chargeback for me personally was a two thousand dollar chargeback against Expedia where they refused to refund a refundable ticket. I filed a chargeback and I got the money back within a few days. It's a good thing, unless you've got data to back your case.

tracker1 7y ago

I'm pretty sure that they should be included as well here... the bigger issue is at what point, and to what extent should civil rights protections extend to publicly available platforms. ie Public Spaces in Private Ownership.