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Is there any virtue in these third party services, or is concealing their fees allowing them to extract significantly more value than they would otherwise be ab

by posguy 6y ago

Is there any virtue in these third party services, or is concealing their fees allowing them to extract significantly more value than they would otherwise be able to in an honest marketplace?

chrisseaton 6y ago
> Is there any virtue in these third party services If not, why do you think anyone uses them?
creddit 6y ago
Who doesn't conceal their fees? What consumer industry gives you detailed cost break downs? I assume when you are looking at, say, getting a Netflix subscription, your first question is "what portion of my dollars are going to AWS, and of the dollars going to AWS, what go to Intel and of the dollars the go to Intel, what go to buying sand"?
- dannyw 6y ago
  When I send a payment through my bank, PayPal, or even Western Union, I am always aware of how much the middleman charges and what their rent is. A Netflix subscription is a not a middleman. Food delivery is a middleman: it processes orders on behalf of restaurants. When I hire someone on Thumbtack, I'd LOVE to know how much of my % goes to the cleaner that actually comes and does the work. When I buy something from eBay, I'd LOVE to know how much of my $155 bid goes to the seller, and how much if it is taxed by eBay. When
  - kube-system 6y ago
    > When I send a payment through my bank, PayPal, or even Western Union, I am always aware of how much the middleman charges and what their rent is. Maybe for sending money and gifts, but not for payments. PayPal doesn’t list merchant fees when you check out. If you pay with your bank account’s debit or credit card, you don’t see those merchant or interchange fees itemized anywhere either. > Food delivery is a middleman: it processes orders on behalf of restaurants. Food delivery also brings the food to your house. An ordering system processes orders.
    - GeneralTspoon 6y ago
      > If you pay with your bank account’s debit or credit card, you don’t see those merchant or interchange fees itemized anywhere either. But arguably you should - most people have no idea that they’re paying a large tax on all their card purchases to private companies. In fact, if these charges were actually appended to the bill, I reckon we’d see proper competition in this space, as users would be incentivised to choose the lowest fee option. Unfortunately EEA legislation has gone in the opposite direction and processing surcharges are no longer allowed, largely due to merchants taking the piss and making up surcharge numbers (but I’d also suspect some lobbying went on by payment processors here too, since this it’s in their interest to hide their fees). This effectively means that customers are incentivised to use their Amex (which charges stupid fees to the merchant) and everyone ends up subsiding Amex users because prices must increase across the board to compensate.
      - kube-system 6y ago
        Some of this stuff is reaching the limits of practicality. Many of the costs that a business might incur when doing business are non-linear with respect to a single sale and/or undefined at that point in time. If a payment processor charges (made up numbers): * $100/month/account * $250 flat hardware cost per POS * $50/month/POS * $0.30 + 2.9% per transaction for the first $10k transactions per month * $0.25 + 2.5% per transaction for all transactions after $10k per month * $50/hr technical support ... then what do you put on any given receipt?
        GeneralTspoon 6y ago
        Only the per-transaction costs are relevant. Just like VAT, you don’t include that you had to pay a VAT registration fee and accounting costs of X per year to process it. Agreed that it does become complicated when you have multi-tiered fee structures like that though.... Also the fact processors charge different amount to process payments from different countries. It definitely needs some thought - but the current state of things is not an ideal place (users incentivised to use expensive and inefficient payment solutions while private corporations siphon off large amounts of money from the economy just for the privilege of being able to move money around).
  - JAlexoid 6y ago
    If you really care - then it's really not hard to find. Otherwise no one will bother looking at it.
  - tatersolid 6y ago
    > A Netflix subscription is a not a middleman. They do make original content now, but Netflix is in general the exact definition of a middle-man. You paid them monthly rent to deliver content created by others (via mailed disc or streaming).
malandrew 6y ago
> or is concealing their fees allowing them to extract significantly more value than they would otherwise be able to in an honest marketplace Which of these services is extracting value right now? Even Grubhub I believe is now running at a loss or close to it. What's missing in this is that you know how much those businesses are charging, but you don't know how much it costs for those businesses to provide their service.

by posguy 6y ago

Is there any virtue in these third party services, or is concealing their fees allowing them to extract significantly more value than they would otherwise be able to in an honest marketplace?

chrisseaton 6y ago

> Is there any virtue in these third party services If not, why do you think anyone uses them?

creddit 6y ago

Who doesn't conceal their fees? What consumer industry gives you detailed cost break downs? I assume when you are looking at, say, getting a Netflix subscription, your first question is "what portion of my dollars are going to AWS, and of the dollars going to AWS, what go to Intel and of the dollars the go to Intel, what go to buying sand"?

dannyw 6y ago
When I send a payment through my bank, PayPal, or even Western Union, I am always aware of how much the middleman charges and what their rent is. A Netflix subscription is a not a middleman. Food delivery is a middleman: it processes orders on behalf of restaurants. When I hire someone on Thumbtack, I'd LOVE to know how much of my % goes to the cleaner that actually comes and does the work. When I buy something from eBay, I'd LOVE to know how much of my $155 bid goes to the seller, and how much if it is taxed by eBay. When
- kube-system 6y ago
  > When I send a payment through my bank, PayPal, or even Western Union, I am always aware of how much the middleman charges and what their rent is. Maybe for sending money and gifts, but not for payments. PayPal doesn’t list merchant fees when you check out. If you pay with your bank account’s debit or credit card, you don’t see those merchant or interchange fees itemized anywhere either. > Food delivery is a middleman: it processes orders on behalf of restaurants. Food delivery also brings the food to your house. An ordering system processes orders.
  - GeneralTspoon 6y ago
    > If you pay with your bank account’s debit or credit card, you don’t see those merchant or interchange fees itemized anywhere either. But arguably you should - most people have no idea that they’re paying a large tax on all their card purchases to private companies. In fact, if these charges were actually appended to the bill, I reckon we’d see proper competition in this space, as users would be incentivised to choose the lowest fee option. Unfortunately EEA legislation has gone in the opposite direction and processing surcharges are no longer allowed, largely due to merchants taking the piss and making up surcharge numbers (but I’d also suspect some lobbying went on by payment processors here too, since this it’s in their interest to hide their fees). This effectively means that customers are incentivised to use their Amex (which charges stupid fees to the merchant) and everyone ends up subsiding Amex users because prices must increase across the board to compensate.
    - kube-system 6y ago
      Some of this stuff is reaching the limits of practicality. Many of the costs that a business might incur when doing business are non-linear with respect to a single sale and/or undefined at that point in time. If a payment processor charges (made up numbers): * $100/month/account * $250 flat hardware cost per POS * $50/month/POS * $0.30 + 2.9% per transaction for the first $10k transactions per month * $0.25 + 2.5% per transaction for all transactions after $10k per month * $50/hr technical support ... then what do you put on any given receipt?
      - GeneralTspoon 6y ago
        Only the per-transaction costs are relevant. Just like VAT, you don’t include that you had to pay a VAT registration fee and accounting costs of X per year to process it. Agreed that it does become complicated when you have multi-tiered fee structures like that though.... Also the fact processors charge different amount to process payments from different countries. It definitely needs some thought - but the current state of things is not an ideal place (users incentivised to use expensive and inefficient payment solutions while private corporations siphon off large amounts of money from the economy just for the privilege of being able to move money around).
- JAlexoid 6y ago
  If you really care - then it's really not hard to find. Otherwise no one will bother looking at it.
- tatersolid 6y ago
  > A Netflix subscription is a not a middleman. They do make original content now, but Netflix is in general the exact definition of a middle-man. You paid them monthly rent to deliver content created by others (via mailed disc or streaming).

malandrew 6y ago

> or is concealing their fees allowing them to extract significantly more value than they would otherwise be able to in an honest marketplace Which of these services is extracting value right now? Even Grubhub I believe is now running at a loss or close to it. What's missing in this is that you know how much those businesses are charging, but you don't know how much it costs for those businesses to provide their service.