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The article (particularly the linked tweet) somewhat addresses your point: Amex and Discover may offer a superficial degree of competition for consumers, but ba
by analyte123 6y ago
The article (particularly the linked tweet) somewhat addresses your point: Amex and Discover may offer a superficial degree of competition for consumers, but banks have to obey Mastercard and Visa's rules even when it comes to offering bank accounts to merchants, otherwise they (and therefore all their other account holders) can't participate in the 80% of card transactions that are on the Mastercard and Visa networks.
If you're a bank who wants their business customers to receive payment via Mastercard, you are not allowed to give a bank account to or otherwise handle payments for anyone on the MATCH list, otherwise Mastercard will shut off your bank's access to their network completely, probably putting you out of business. There is little transparency about how entities end up on this MATCH list. The article does not propose an exact regulation, but the end goal would be that a single company can't arbitrarily shut people out of most of the financial system.
- Polylactic_acid 6y agoI have seen many stories of legal and legitimate businesses for things like weed (legal in the stores location) and legal porn sites getting their merchant accounts shut down because the payment processors just don't want them to deal with it leaving cash as the only option.
- bagacrap 6y agoWeed is still federally illegal in all locations in the US.
- unethical_ban 6y agoGood point that perhaps "regulation" is not a good thing, and that the most free, common payment method is the decentralized one: cash. People laugh about bitcoin, and the implementation surely has its drawbacks, but the idea of a decentralized digital payment system is alluring.
- ElCapitanMarkla 6y agoThe hard reality is there’s a high rate of fraud and chargebacks in a lot of these types of businesses. It’s a tricky one for the merchants to manage but things like 3DS2 should help, maybe, if they ever sort it out properly...
- abi 6y agoI see your point from a merchant perspective. A thought: Why don't merchants in high-risk categories such as porn, gambling, etc. use debit transactions instead? Where they wait for funds to be transferred into their account and settled before providing goods and services.