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This part really made me think: He drew a comparison to Visa and Mastercard and the global credit card payment system, where vendors charge 2.5% to 3.5% fees f

This part really made me think: He drew a comparison to Visa and Mastercard and the global credit card payment system, where vendors charge 2.5% to 3.5% fees for transactions, while store vendors such as Steam, Apple, and Google charge 30%. He said the global payments industry is proof that highly profitable companies can arise from just taking the 2.5% to 3.5% cut. He makes a very good point - tech companies do charge very high fees for using their app stores. Do regulators control how much fees payment gateways can charge?

CarVac 7y ago
A payment gateway isn't a channel for discovering a vendor, though. You don't go to Visa or PayPal when doing your shopping. You go to a vendor, and the vendor has a choice of whether or not to accept a given method of payment. That's what effectively limits the fees on payments.
- webmobdev 7y ago
  > That's what effectively limits the fees on payments. And competition. When India launched its own payment processing gateway and card, branded RuPay, that charged 23% lower fees than Mastercard and Visa, they too were forced to drop the exorbitant fees they charged banks and vendors. -> https://www.financialexpress.com/industry/banking-finance/rupay-shines-from-limited-presence-in-2013-to-capturing-half-of-market-now-3-reasons-behind-phenomenal-rise/1378445/ https://www.financialexpress.com/industry/banking-finance/ru... -> https://economictimes.indiatimes.com/small-biz/sme-sector/visa-slashes-fee-on-debit-card-payments/articleshow/64565741.cms https://economictimes.indiatimes.com/small-biz/sme-sector/vi... -> https://economictimes.indiatimes.com/industry/banking/finance/rupay-forces-mastercard-to-call-for-fair-competition/articleshow/49574972.cms https://economictimes.indiatimes.com/industry/banking/financ...
m463 7y ago
I actually thought of this a different way... visa and mastercard are gatekeepers enormously inflating the price of transactions. The only challenges to this have been paypal which didn't seem to go that far, and more recently bitcoin.
- webmobdev 7y ago
  > visa and mastercard are gatekeepers enormously inflating the price of transactions. Doesn't the same apply to Apple and Google toO on their respective OSes? And while they (Visa/MC) are behemoths in their fields, I don't exactly agree with the "gatekeeper" terminology as they have a lot of competitors. That isn't the case with Apple App Store and Google Play Store (licensed android).
  - m463 7y ago
    I think visa/mc have very little true competition. My way of looking at this is -- have transaction costs fallen? Maybe we're on the verge of change though.
    - webmobdev 7y ago
      I think that was true earlier even though there were smaller players like JCB, Discover etc. But now Mastercard and Visa are facing stiff competition in India and China, where they've already been crowded out by the local players: https://digital.hbs.edu/platform-digit/submission/visa-and-mastercard-are-losing-fast-to-indian-alternatives/ https://digital.hbs.edu/platform-digit/submission/visa-and-m...
robocat 7y ago
From article "Sweeney created the Epic Games Store, which only takes 12% of revenues" Which is a lot more than 2.5% to 3.5%...

CarVac 7y ago

A payment gateway isn't a channel for discovering a vendor, though. You don't go to Visa or PayPal when doing your shopping. You go to a vendor, and the vendor has a choice of whether or not to accept a given method of payment. That's what effectively limits the fees on payments.

webmobdev 7y ago
> That's what effectively limits the fees on payments. And competition. When India launched its own payment processing gateway and card, branded RuPay, that charged 23% lower fees than Mastercard and Visa, they too were forced to drop the exorbitant fees they charged banks and vendors. -> https://www.financialexpress.com/industry/banking-finance/rupay-shines-from-limited-presence-in-2013-to-capturing-half-of-market-now-3-reasons-behind-phenomenal-rise/1378445/ https://www.financialexpress.com/industry/banking-finance/ru... -> https://economictimes.indiatimes.com/small-biz/sme-sector/visa-slashes-fee-on-debit-card-payments/articleshow/64565741.cms https://economictimes.indiatimes.com/small-biz/sme-sector/vi... -> https://economictimes.indiatimes.com/industry/banking/finance/rupay-forces-mastercard-to-call-for-fair-competition/articleshow/49574972.cms https://economictimes.indiatimes.com/industry/banking/financ...

m463 7y ago

I actually thought of this a different way... visa and mastercard are gatekeepers enormously inflating the price of transactions. The only challenges to this have been paypal which didn't seem to go that far, and more recently bitcoin.

webmobdev 7y ago
> visa and mastercard are gatekeepers enormously inflating the price of transactions. Doesn't the same apply to Apple and Google toO on their respective OSes? And while they (Visa/MC) are behemoths in their fields, I don't exactly agree with the "gatekeeper" terminology as they have a lot of competitors. That isn't the case with Apple App Store and Google Play Store (licensed android).
- m463 7y ago
  I think visa/mc have very little true competition. My way of looking at this is -- have transaction costs fallen? Maybe we're on the verge of change though.
  - webmobdev 7y ago
    I think that was true earlier even though there were smaller players like JCB, Discover etc. But now Mastercard and Visa are facing stiff competition in India and China, where they've already been crowded out by the local players: https://digital.hbs.edu/platform-digit/submission/visa-and-mastercard-are-losing-fast-to-indian-alternatives/ https://digital.hbs.edu/platform-digit/submission/visa-and-m...

robocat 7y ago

From article "Sweeney created the Epic Games Store, which only takes 12% of revenues" Which is a lot more than 2.5% to 3.5%...