4 ms·

Just me or does anyone else think there’s going to be a reckoning in interchange regulation in the US like Europe soon? Merchants are hurting, and now the pand

by xoxoy 6y ago

Just me or does anyone else think there’s going to be a reckoning in interchange regulation in the US like Europe soon? Merchants are hurting, and now the pandemic has forced cashless transaction adoption at an accelerating pace. The egregiousness of both exempt debit interchange and credit interchange fees is almost laughingly insane compared to Europe, where it is heavily regulated. Would be surprised not to see bi-partisan action sooner rather than later addressing this very question eg Durbin Amendment Part 2.

thoraway1010 6y ago
My requests - pass interchange onto the customer - and allow merchant to do so explicitly at whatever rate they want (not cash discount or anything). Ie, merchant might cover first 1% of interchange, pass rest on (so "premium" card holders with high interchange and high rewards pay the big price). We do have to get to chip+pin so the fraud issues diminish.
- xoxoy 6y ago
  way too confusing so won’t work if there’s a different fee depending on the specific card you choose to work maybe just allowing a discount for cash and pin debit
- xoxoy 6y ago
  there’s probably very little fraud with touchless payments like Apple Pay - most issuers require some verification to add the card to a phone in the first place. if that becomes a growing % of in person payments i don’t see the justification for high card present rates. also some data suggests people have moved to more debit transactions during Covid over credit which are cheaper to process anyway and usually means less fraud - so maintaining a fixed processing rate means margins for processors are probably even better right now
  - thoraway1010 6y ago
    I wonder if Apple and Google and Facebook and Microsoft and Stripe had just done something "anti competitive" and entered the payment space squarely themselves if rates would come down. They seem more consumer experience directed than other players. The security they can deploy (apple pay seems pretty good now as long as card onboarding isn't broken) seems like they could drive down to basically low interchange?
- mchusma 6y ago
  +1 this request! If consumers feel the credit card fees more directly, they will likely revolt.
mchusma 6y ago
This x1000. Visa/MasterCard/amex are a huge tax on society, and they won by anti-competitive processes. Society wins very little by a 2-3% tax on all transactions. I think the problems with credit card for businesses in the US are almost solely cost. There are other minor issues, but until Stripe works to bust up the interchange, they really aren't working on the true problem with payments. (Fraud is a distant #2 issue for most merchants and for most people I've chatted with Stripe's radar is more expensive than the fraud itself).
- ilikerashers 6y ago
  I doubt Stripe or any payment provider has the scale to take on Visa/Mastercard. China is experimenting here: https://www.ft.com/content/fec06de9-ac43-4ab8-81f3-577638bd3c16 https://www.ft.com/content/fec06de9-ac43-4ab8-81f3-577638bd3....
  - xoxoy 6y ago
    don’t think they are suggesting that Stripe create a competing network just like in Europe the government would regulate interchange, which they’ve mostly failed to do here outside of the Durbin Amendment But Durbin has raised red flags about excessive swipe fees just this past week, and my bet is that a recovery plan for small biz will very closely scrutinize interchange, and possibly payment processing as a whole https://www.durbin.senate.gov/newsroom/press-releases/durbin-and-welch-to-fed-excessive-debit-swipe-fees-are-hurting-merchants-during-pandemic https://www.durbin.senate.gov/newsroom/press-releases/durbin...
deleted 6y ago
[deleted]
absb 6y ago
My co-founder and I started Imagine Financial to solve exactly this problem. We are coming out of stealth and addressing the problem of interchange head-on. We believe interchange is an unnecessary excessive tax, and we are offering an alternative to all US merchants. This is an incredibly hard problem, we are learning and don't have all the answers, but it's about time someone tried to disrupt it. Businesses and consumers are suffering, and they should not be charged in this way. Our network is rolling out over the next few weeks and would love to gather feedback from those who want to get involved in changing this industry! http://www.gotimagine.com/merchants http://www.gotimagine.com/merchants Feel free to reach out to community@gotimagine.com to get involved.

by xoxoy 6y ago

thoraway1010 6y ago

My requests - pass interchange onto the customer - and allow merchant to do so explicitly at whatever rate they want (not cash discount or anything). Ie, merchant might cover first 1% of interchange, pass rest on (so "premium" card holders with high interchange and high rewards pay the big price). We do have to get to chip+pin so the fraud issues diminish.

xoxoy 6y ago
way too confusing so won’t work if there’s a different fee depending on the specific card you choose to work maybe just allowing a discount for cash and pin debit
xoxoy 6y ago
there’s probably very little fraud with touchless payments like Apple Pay - most issuers require some verification to add the card to a phone in the first place. if that becomes a growing % of in person payments i don’t see the justification for high card present rates. also some data suggests people have moved to more debit transactions during Covid over credit which are cheaper to process anyway and usually means less fraud - so maintaining a fixed processing rate means margins for processors are probably even better right now
- thoraway1010 6y ago
  I wonder if Apple and Google and Facebook and Microsoft and Stripe had just done something "anti competitive" and entered the payment space squarely themselves if rates would come down. They seem more consumer experience directed than other players. The security they can deploy (apple pay seems pretty good now as long as card onboarding isn't broken) seems like they could drive down to basically low interchange?
mchusma 6y ago
+1 this request! If consumers feel the credit card fees more directly, they will likely revolt.

mchusma 6y ago

This x1000. Visa/MasterCard/amex are a huge tax on society, and they won by anti-competitive processes. Society wins very little by a 2-3% tax on all transactions. I think the problems with credit card for businesses in the US are almost solely cost. There are other minor issues, but until Stripe works to bust up the interchange, they really aren't working on the true problem with payments. (Fraud is a distant #2 issue for most merchants and for most people I've chatted with Stripe's radar is more expensive than the fraud itself).

ilikerashers 6y ago
I doubt Stripe or any payment provider has the scale to take on Visa/Mastercard. China is experimenting here: https://www.ft.com/content/fec06de9-ac43-4ab8-81f3-577638bd3c16 https://www.ft.com/content/fec06de9-ac43-4ab8-81f3-577638bd3....
- xoxoy 6y ago
  don’t think they are suggesting that Stripe create a competing network just like in Europe the government would regulate interchange, which they’ve mostly failed to do here outside of the Durbin Amendment But Durbin has raised red flags about excessive swipe fees just this past week, and my bet is that a recovery plan for small biz will very closely scrutinize interchange, and possibly payment processing as a whole https://www.durbin.senate.gov/newsroom/press-releases/durbin-and-welch-to-fed-excessive-debit-swipe-fees-are-hurting-merchants-during-pandemic https://www.durbin.senate.gov/newsroom/press-releases/durbin...

deleted 6y ago

[deleted]

absb 6y ago

My co-founder and I started Imagine Financial to solve exactly this problem. We are coming out of stealth and addressing the problem of interchange head-on. We believe interchange is an unnecessary excessive tax, and we are offering an alternative to all US merchants. This is an incredibly hard problem, we are learning and don't have all the answers, but it's about time someone tried to disrupt it. Businesses and consumers are suffering, and they should not be charged in this way. Our network is rolling out over the next few weeks and would love to gather feedback from those who want to get involved in changing this industry! http://www.gotimagine.com/merchants http://www.gotimagine.com/merchants Feel free to reach out to community@gotimagine.com to get involved.